My morning routine includes starting the day with nature while listening to the ocean, music, or podcast. One morning, a podcast struck a chord both personally and professionally, which was:
While ambition creates healthy individual satisfaction and competition, ambition rooted in selfishness, envy, pride, materialism, etc.. will have significant negative impact.
This week reading headline news / social media posts as well as attending a few different seminars around Crypto and Artificial Intelligence (AI), I analyzed how an individual’s ambition could create risk based on available information and knowledge. From my perspective, let us discuss three different scenarios:
- Chat Platform – Let me start off by stating any business especially national security information should never be communicated via a chat platform and communication of such information should be limited in who, what, and how information is classified; but this past week – similar to any business employee, a government employee made a big “oopsie” without thinking through the security of the platform or how other individuals may utilize the information given their personal ambitions – specifically, how others could be added to the conversation, message forwarded, screenshots taken, etc. While everyone is in an uproar, what is interesting – no one is paying attention to how this happens every day causing increased time and cost to regulators and businesses. For instance, we as individuals share personal identifiable information (name, address, voice recordings, location, stories of our lives, beliefs, pictures, etc.) and even financial information daily via social apps, text, chats, etc. because we trust the people and platforms in which we share cannot be hacked, compromised, forwarded, screenshots made, individuals added, deepfakes made, etc. – the issue is all this information can be utilized to commit fraud, financial crimes, destroy relationships, etc. based on the ‘ambition’ of others.
- Crypto Exchanges – this is an investment channel which is here to stay and personally, I need to embrace this type of investment. Conceptually, crypto is no different than current and historical investment strategies and trading. While the risks remain the same, there is uniqueness with crypto as technological risks (e.g., security, OFAC/AML monitoring, customer experience, etc.) are more prevalent given existing and emerging technologies which can be utilized to combat traditional controls.
- Product/Service Misinformation – businesses are now largely transacting over the internet whether website, social media, digital marketplaces, workspaces, etc. as well as utilizing digital channels for payments. As a result, enhanced due diligence over these businesses, platforms, individuals, third parties, etc.. is becoming more important to determine appropriateness, validity, and authenticity. As an example, my daughter brought me a business card last night from an individual who stated he could give her financial advice and so she shared it with me. Doing my due diligence, here is what I was able to identify:
- Firm name – business card tied to a valid religious based financial advisory firm per internet search (still unable to validate the authenticity of website)
- Business Logo – the one on the card differed from the one on the website (still unable to locate the logo on the web to align to the business card)
- Name Search – when typing the individuals name into the website, I could not locate him. When searching his name on the government regulated investment professional check website, while the firm was found to be valid, I was unable to locate the individual’s name.
- Certifications – he held an insurance underwriting certificate but not a financial advisory certificate.
- Disclosure – the card had the appropriate legal language but to a general individual could be misleading – what I have assumed is he works for their insurance affiliate versus the actual registered financial advisory firm.
My knowledge on how to research is due to my career and industry choices; however, when inquiring of others – they were unaware and would have just stopped at looking up the website based on what was advertised and conveyed to them by this individual – who was not licensed to provide financial advice rather licensed to underwrite insurance policies.
In summary, while we assess risk from an operation, investment, compliance, and infrastructure perspective, how are risks considered and assessed to combat ambition rooted in those activities which cause negative harm to your organization, including:
- Utilizing existing technologies, marketing, advertising, operations, etc. of your current control structures?
- Adapting / changing approach due to emerging technologies and activities?
- Factoring conflicts of interest?
Personally, these are the risks which any business needs to monitor and oversee.
Therefore, consideration questions I leave with you:
- How does an individual’s ambition create risk to the customers they serve on behalf of the businesses they own or work?
- When coupling AI and Quantum computing, how do biases, inaccuracies, and technology risks increase thereby allowing sophistication to become more prevalent due to the inability to control or prevent learning the logic around system configurations built to mitigate the business risk in your organization and ultimately, result in increased fraud schemes and financial crime?
- While security policies typically define and identify data classification standards, retention periods, and who should have access; does it address how individuals are able to communicate, destroy, and share information in which they have access?
Articles to Read:
Artificial Intelligence (AI) and Investment Fraud: Investor Alert | Investor.gov
Investment Professional / Firm Check: