Here is the converted article in Markdown format:

Banks Must Ensure Effective Risk Management and Internal Controls to Stay Ahead of Fraud and Cyber Threats

=====================================================

Banking institutions must prioritize governance, risk assessment, and internal audit processes to prevent financial fraud and protect against cyber attacks.

Kuala Lumpur, Malaysia - The banking industry is facing unprecedented threats from financial fraud and cyber attacks. In response, banking institutions must ensure that they have effective governance, risk assessment, and internal control frameworks in place to detect and prevent these types of incidents.

Prioritizing Effective Governance

According to a recent report by the Institute of Internal Auditors (IIA), Committee of Sponsoring Organization (COSO) and Bank Negara Malaysia (BNM), banking institutions must prioritize three key areas:

• Control Environment and Risk Assessment: Establishing a robust control environment and risk assessment process, including identifying, assessing, and mitigating risks that could impact the bank’s operations and financial performance.
• Fraud Prevention Management Internal Audits: Conducting regular internal audits to detect and prevent financial fraud, focusing on identifying potential vulnerabilities in the bank’s operations and systems.
• Anti-Money Laundering (AML) Internal Audits: Conducting regular AML internal audits to detect and prevent money laundering and terrorist financing activities.

IT Risks and Audit

In addition to these areas, the report highlights the importance of IT risks and audit. Banking institutions must prioritize:

• IT Governance and Risk Management: Ensuring that information systems are secure and reliable by implementing effective IT governance and risk management frameworks.

Conclusion

The banking industry is facing unprecedented threats from financial fraud and cyber attacks. To stay ahead of these threats, banking institutions must prioritize effective governance, risk assessment, and internal control frameworks. By doing so, they can detect and prevent potential vulnerabilities in their operations and protect the integrity of their systems and data.

Recommendations

• Establish a robust control environment and risk assessment process to identify, assess, and mitigate risks that could impact your operations and financial performance.
• Conduct regular fraud prevention management internal audits to detect and prevent financial fraud.
• Conduct regular AML internal audits to detect and prevent money laundering and terrorist financing activities.
• Prioritize IT governance and risk management to ensure information systems are secure and reliable.

Assessment Criteria

To assess the effectiveness of a bank’s risk management and internal controls, consider the following criteria:

• The effectiveness of the bank’s control environment and risk assessment process
• The effectiveness of the bank’s fraud prevention management internal audit process
• The effectiveness of the bank’s AML internal audit process
• The effectiveness of the bank’s IT governance and risk management framework