Week 7 Flashcards
1
Q
What two keys make up Public-Key Cryptography
A
public (shared) & private (secret).
2
Q
benefit of Public-Key Cryptography
A
Ensures secure transactions and non-repudiation.
3
Q
what are Cryptocurrencies
A
Digital tokens using cryptography, decentralized peer-to-peer architecture.
4
Q
what do Operational risks in cryptocurrencies refer to
A
potential losses from failed internal processes, people, systems, or external events.
5
Q
what is used to Verify signatory identity using publicly available data.
A
Digital Signatures
6
Q
what does Decentralized mean
A
No central control or monetary policy; rules are public.
7
Q
what is the Transaction Process of bitcoin
A
Transactions are broadcast to the network and verified by nodes.
7
Q
what is Blockchain
A
A shared public ledger containing a record of
all Bitcoin transactions
7
Q
what is Mining
A
New coins created by solving cryptographic puzzles. Bitcoin capped at 21M coins
8
Q
where are verified bitcoin transactions added to
A
blockchain, a public ledger.
9
Q
what is Blockchain formed from
A
mined blocks, which verify transactions or mine new coins
10
Q
true or false, The history of every coin can be tracked from
the day it was created.
A
true
11
Q
how is The blockchain updated
A
periodically updated with new transaction blocks
12
Q
crypto vulnerabilities
A
- Decentralized
P2p verification - irreversible transactions
- anonymity
-sensitive info
-price/value instability
-international regulatory risk
13
Q
exposures of crypto
A
- multiplicity of jurisdictions and micropayments
- reliance on hardware and software
14
Q
why is Decentralized Governance: a risk
A
- Lack of central authority.
- Risk of coordinated attacks.
- Majority control of CPU power is essential for network security.
- Risk of protocol changes
15
Q
why is Peer-to-Peer Verification a risk
A
- Potential for double-spending attacks.
- Vulnerability to selfish mining strategies
16
Q
why is Transaction Irreversibility seen as a risk
A
- Losses due to irreversible transactions in case of errors or fraud.
- IT disruptions can lead to irreversible losses
17
Q
why is Anonymity seen as a risk
A
- Challenges in tracking and accountability
18
Q
why is Multiplicity of Jurisdictions seen as an exposure
A
Legal and regulatory complexities.
19
Q
why is multitiplicity of Micropayments seen as an exposure
A
High volume of small transactions increasing system strain.
20
Q
Why is Hardware and Software Reliance seen as an exposure
A
- Risks associated with system failures and cyberattacks
21
Q
4 key operational risk exposures
A
Transaction
Operating
Translation
Economic
22
Q
Privacy challenges of bitcoin
A
- Bitcoin users can create a new address per transaction for privacy.
- Balances privacy vs. regulatory oversight.
23
Internal Fraud Risks of crypto
Unauthorized Activities, Tax Evasion
24
what Unauthorized Activities represent internal fraud risks of crypto
* Theft and misappropriation of assets.
25
External Fraud Risks of crypto
Theft and Fraud, Systems abuse
26
3 components of the external fraud triangle
Motivation - incentive
Rationalization - justification
Opportunity - assurance
27
Two Business Disruption and Systems Failures
Software, Hardware
28
Crypto Hardware failures
Failures in mining network nodes leading to transaction delays
29
Two types of Governance Risks in crypto
Decentralized Control:
Changes in Protocols
30
risk of anonymity in crypto
Money Laundering:Difficulty in tracking transactions
Legal Risks:Compliance with regulations and laws
31
why is handling of sensitive info dangerous for crypto
Private Key Risks: Loss or theft of private keys leads to loss of funds.
Processing Errors: Errors in data entry or address information
32
regulatory challenges in crypto
INTERNATIONAL REGULATORY RISK: NAVIGATING MULTIPLE LEGAL FRAMEWORKS.
REGULATORY COMPLIANCE: ENSURING ADHERENCE TO DIVERSE REGULATIONS
33
what are Mitigation Actions for Internal Fraud
Access Control for private keys.
Regular Audits
34
what are Mitigation Actions for External Fraud
Cybersecurity Measures
Incident Response Plans
35
Mitigation Actions for Business Disruption
REDUNDANCY (backup) SYSTEMS
DISASTER RECOVERY PLANS
35
two Future Trends in Risk Management
Advanced Analytics - AI and Big Data
Blockchain Technology- improves transparency and security
36
how can Monitoring and Reporting of crypto be improved
Real-Time Monitoring
Regular Reporting
37
what is Resilience
The capacity to recover quickly from difficulties; toughness
38
what is Reputation
The beliefs or opinions that are generally held about someone or something based on past behavior or character.
39
How can you enhance reputation/resilience
Positive stakeholder engagement
40
what is Reputation Risk based on
stakeholder perception of past behavior
41
Reputational risk stems from
uncertainty and random events affecting reputation
42
Two types of reputational risk
Reputation built on past behavior.
Reputation impacted by operational incidents.
43
Key drivers for a good reputation in the financial industry
* Regulatory compliance and transparency.
* Product quality and customer satisfaction.
* Investor expectations of financial performance.
44
How to Maintain a Good Reputation
Embed reputation in daily activities.
Reward actions that improve reputation.
Reactive crisis management alone is not enough; proactive engagement is key
45
What are the Benefits of a Good Reputation
Higher sales and competitive advantage.
A virtuous circle: good reputation leads to better business outcomes.
46
what is the Relationship Between Resilience and
Reputation
* A strong reputation provides a foundation for resilience.
* Resilience during crises reinforces and preserves reputation.
47
Key Components of Reputation Management
Prevention, Mitigation
48
Prevention methods for reputation management
Image building
Stakeholder mapping and relationship building.
Scenario identification and regular updates.
Communication strategy and contingency planning.
49
Mitigation methods for reputation management
Communication: Regret, Reason, Remedy.
Rapid response and transparency.
Stakeholder differentiation
50
Strategies for Building a Good Reputation
communicate a clear vision and values.
strong stakeholder relationships
consistent and transparent communication.
Embed day to-day reputation-building practices
51
Benefits of Building a Good Reputation
Higher sales and more referrals.
Attraction of top talent.
Enhanced customer loyalty and satisfaction
52
Two ways towards Maintaining a Good Reputation
Continuous Effort
Crisis Preparedness
53
What are Key qualities that are considered Crisis Management Essentials
Speed: Response times
Competence: Use right specialists
Transparency: Maintains stakeholder trust
54
What are the two response teams considered crisis management essentials
Technical team: Focuses on restoring normal processes.
Communication team: Manages media and stakeholder communications
55
Benefits of a Good Reputation
Competitive Advantage
Talent Cultivation
Virtuous Circle
56
What are the key Elements of building resilience
* Good crisis management.
* Strong stakeholder relationships.
* Robust business continuity plans.
57
Key elements of Crisis Communication Strategies
Regret: Acknowledge the issue.
Reason: what happened.
Remedy: Outline steps to resolve the issue and prevent recurrence
58
Best Practices of Crisis Communication Strategies
Be swift and transparent.
Tailor communication to different stakeholders.
Maintain a positive narrative
59
Role of Media relations in Reputation Management
Build positive relationships with media.
Use media to communicate during crises.
60
What is Media Training
Train communication teams for effective media interaction during crises
61
what Planning & Testing goes into Crisis Management and Resilience
Preparedness: Scenario analysis, crisis simulations, and stakeholder management improve response.
Continuity Testing: Often limited to technical recovery, should include communication.
62
How to Measure Reputation and Resilience
Metrics
Regular Assessment
63
What metrics can measure Reputation and Resilience
Customer satisfaction and loyalty.
Media coverage and public perception.
Employee engagement and retention
64
What has driven the Evolution of Operational Risks
technological advancements and digital transformation
65
what is the top operational risk
Cybercrime - increased data volume and complexity.
66
Growing reliance on third-party vendors increases what risks
risks related to business continuity, legal exposure, and information security.
67
How has technology helped with operational risk management
Data analytics, AI, and ML provide insights into risk and behavior.
Big data aids in understanding risks and enhancing performance
68
Challenges of Rising Operational Risk
Cost-cutting post-crisis led to reduced service quality and potential large incidents.
New business models challenge traditional finance models.
69
What does COSO framework
emphasize
better risk management can enable better performance.
70
Future Trends in Reputation and Resilience Management
Technological Advancements: AI + Big Data
Integration with Risk Management
Continuous Improvement
