MODULE 5 Flashcards
The risk arising when a borrower or counterparty fails to meet financial obligations
Credit risk
The potential for losses due to changes in market conditions such as interest rates, foreign exchange rates, and stock prices
Market risk
Losses caused by inadequate internal processes, human error, or system failures, including cybersecurity threats
Operational risk
Risks arising from data breaches, fraud, and identity theft
Cybersecurity and fraud risk
A tool used to estimate the maximum potential loss on a portfolio under normal market conditions
Value at Risk
A security process requiring users to verify their identities through multiple steps
Multi-factor authentication
A framework used to identify and mitigate operational risks across an organization
Risk and Control Self-Assessment framework
Scrambling data during transmission to protect it from being intercepted
Encryption
The use of fingerprints or facial recognition for secure access to banking platforms
Biometric authentication
A decentralized alternative to traditional banking, providing secure and transparent transaction processing
Blockchain
Allows third-party applications to access bank data with user consent, fostering personalized financial services
Open banking
A framework ensuring banks maintain sufficient capital buffers to withstand potential losses
Basel Accords
A tool simulating adverse market scenarios to identify vulnerabilities in financial portfolios
Stress testing
An event where hackers exploited weaknesses in a bank’s SWIFT network security to steal $81 million
Bangladesh Bank heist
A Philippine mobile banking app that allows clients to access e-wallets, transfer funds, and pay bills
UnionBank app
A digital payment method widely accepted in the Philippines for fast and cashless transactions
GCash
A cyber fraud incident in 2021 where fraudsters illegally accessed customer accounts and transferred funds
BDO Unibank cyber fraud
The use of AI algorithms to analyze transaction behaviors and detect fraud attempts
AI-driven fraud detection
The global financial crisis exemplifying failures in managing credit and market risk
2008 financial crisis
A security measure used to identify unusual transaction patterns and monitor for suspicious activities
Anti-fraud detection systems
A framework used by banks to ensure compliance with regulatory standards and internal controls
Operational risk management frameworks
The tool that helps assess the likelihood of default among borrowers
Credit scoring models
A tool used to simulate adverse scenarios for better risk preparation
Stress testing
A cybersecurity measure ensuring transaction confidentiality
End-to-end encryption
A Philippine bank known for its user-friendly digital banking interface
UnionBank
The rapid adoption of technology reshaping financial transaction security
Digital transformation
A security process requiring OTPs for transaction verification
One-time passwords
A global bank utilizing AI algorithms for risk assessment
JPMorgan Chase
The technology enabling seamless financial services integration with consent
Open banking APIs
An organization setting global standards for capital adequacy in banking
Basel Committee on Banking Supervision
The major 2014 data breach affecting millions of households
JPMorgan Chase data breach
The banking service offering decentralized remittance processing
Blockchain-based remittance
A global financial giant investing in cryptocurrency infrastructure
Goldman Sachs
The practice of regularly simulating market downturns to test stability
Stress testing practices
An emerging trend enabling personalized financial services using customer data
AI-driven banking solutions
The rise of fintech firms challenging traditional banking models
Competitive pressure from fintech
The Philippine central bank’s guidelines for promoting interoperability in digital finance
Bangko Sentral ng Pilipinas open banking initiative
The global crisis resulting from inadequate credit and risk assessments
2008 financial crisis
A mobile wallet offering financial inclusion in rural Philippines
GCash
A major cyber threat targeting banks due to increasing digital adoption
Phishing attacks
