Digital Money: Operational Risks and the Threats to Operational Resilience

In Digital Money: Operational Risks and the Threats to Operational Resilience, Patrick McConnell evaluates the far-reaching impacts of emerging types of digital money upon financial institutions’ operational risk and resilience profiles.

The rise of digital money potentially offers diverse benefits such as faster transactions, lower transaction fees, greater security, transparency and greater inclusivity. However, the author highlights how the move towards the full digitisation of money could radically change the relationship between banking operations and operational risks.

McConnell discusses how many new operational risks could potentially arise as digital money innovations are integrated with existing systems. In addition to helping to manage existing risks, operational risk management groups will have to become experts in technology and cryptography – both brand-new digital money technologies and existing technologies that will have to be replaced or significantly modified.

The author explores how the digital financial ecosystem is adapting – providing a comprehensive analysis that covers emerging types of digital money, evolving global and instant payments, cryptocurrencies, central bank digital currencies and stablecoins, and other financial and technology innovations, such as post-quantum computing. McConnell discusses potential digital money vulnerabilities that could disrupt the core systems of all banks and thus the overall resilience of the banking system. McConnell’s analysis of what’s at stake is underpinned by his decades of experience in risk management and IT.