REGULATORY INITIATIVES
In September , the Federal Deposit Insurance Corporation ( FDIC ) decided to ease regulatory restrictions on banks and financial institutions ( FIs ), particularly in the context of disaster relief , an important and needed practice . 1 Essentially , the FDIC extended the reporting time for risk conditions and the overall health of a financial entity .
This measure is intended to help ensure that FIs can remain in compliance while increasing their focus on addressing immediate concerns for affected customers and workers . As the rules come into effect , much can be done to maximize the effectiveness of this latest regulatory relief . Allowing organizations to reduce regulatory pressure during an unforeseen disaster is always good practice and allows them to prioritize safety and soundness over reporting . That said , not all circumstances are alike .
In practice
It is important to consider that some potential drawbacks might include delays in extracting financial data from the silos of stored information , making it more difficult for regulators , investors and the public to assess the financial health of affected institutions . With that in mind , it was prudent for the FDIC to strike a balance between providing this flexibility and transparency with regulatory oversight , something attainable under the new regulatory regime .
For example , for consumers who may have used a recently damaged home as collateral for a previous loan , the guidance from the FDIC may grant much-needed breathing room in making payments . It seems fair that , as a family may face temporary homelessness due to natural disasters , the FDIC is encouraging institutions not to make this permanent owing to a change in the value of the asset .
Moreover , during natural disaster events such as hurricanes , floods and wildfires , banks face various challenges in terms of operational continuity . However , banks and FIs might also want to call upon artificial intelligence ( AI ) to come to the rescue for customer care and risk management during such difficult times .
Using AI
AI plays a critical role in helping to predict and analyze historical data , weather patterns and other relevant information to forecast natural disasters and minimize financial impacts .
While the implementation of AI can help track and monitor secure digital transactions , it can also detect potentially fraudulent activities that may increase during or after natural disasters . It has an inherent ability to assess portfolio risks , helping banks make more informed decisions about risk management implementation .
In order to get ahead of potential threats and unusual transactions or patterns , AI can also help delegate responsibilities to the workforce . In a crisis , new technologies can be a reinforcement from senior management all the way down to the teller level . AI works in real time and can be integrated with the early alerts and warning signs to identify all these vulnerabilities and take the necessary steps to reallocate infrastructure or relocate critical operations and personnel where needed .
We have all seen the AI-driven chatbots and automated pop-ups where websites wish to help communicate with customers , and they can also provide tangible information to and from the customer ’ s user interface and the local , regional or national bank level . These AI-powered virtual assistants can handle routine customer service inquiries , freeing up personnel to focus on the more complex tasks and actions needed during a time of vulnerability .
While these are attainable add-ons to any business today , on the back end , AI can assist in a barrage of services , including automating data recovery and backups even when physical data centers may seem to be compromised ; they can ensure regulatory compliance and can help banks and FIs keep track of reporting requirements and provide necessary assistance in meeting them .
44 acamstoday . org