A practical process mining approach for compliance management

2019 ◽  
Vol 27 (4) ◽  
pp. 464-478
Author(s):  
Michael Becker ◽  
Rüdiger Buchkremer
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Data Privacy ◽  
Process Mining ◽  
Financial Institution ◽  
Real Life ◽  
Practical Implementation ◽  
Process Data ◽  
Content Type ◽  
Compliance Management

Purpose The purpose of this study is to examine whether the compliance management activities in the risk management environment of financial institutions can be enhanced using a Process Mining application. Design/methodology/approach In this research, an implementation procedure for a selected Process Mining application is developed and evaluated at a financial institution in Germany. Findings The evaluation of the process data with the Process Mining application Disco shows that the compliance of the real-life execution of business processes can be monitored in real-time. Moreover, potential non-compliant activities and durations can be analysed in a detailed manner. Research limitations/implications When the research results are regarded, it must be considered that a general condition for the usage of a Process Mining application is that the process data is available and exportable in the required format and that data privacy regulations are fulfilled. Originality/value This research presents a practical use case for the implementation of a Process Mining application at the risk management department of financial institutions. It shows the value of using a technical application to carry out tedious tasks that are usually executed manually. This value is discussed and compared with the aim to help financial institutions in determining how the effectiveness and efficiencies of compliance management activities can be improved. Therefore, this research can be taken as a foundation for the practical implementation of a Process Mining application at financial institutions.

scholarly journals A SUCCINCT ANALYSIS OF MITIGATING LIQUIDITY RISK IN ISLAMIC BANKS IN THE LIGHT OF LIQUIDITY AND RISK MANAGEMENT PRINCIPLES

2019 ◽  
Vol 4 (1) ◽  
pp. 527
Author(s):  
Atharyanshah Puneri ◽  
Naeem Suleman Dhiraj ◽  
Hafiz Benraheem
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Financial Institution ◽  
Real Life ◽  
Liquidity Risk ◽  
Islamic Banks ◽  
Liquidity Management ◽  
Islamic Financial Institutions ◽  
The Subject ◽  
Key Aspects

Liquidity management has been incessantly challenging for the financialinstitutions and especially Islamic financial institutions due to their nature of business. The�convoluted nature of liquidity management impedes the task of Islamic banks in managing�their liquidity efficiently. Given the intricacies of the subject matter, this paper delves into�elaborating the key aspects of liquidity management; subsequently, discusses the�consequences of poor liquidity management and problems inherent in managing the latter by�analyzing the real-life failure of Islamic financial institution as a result identifying the issues that could possibly jeopardize the existence of the Islamic banks. Finally, equipping the�readers with tools to mitigate the liquidity risk.

Do disclosure and transparency affect bank’s financial performance?

2019 ◽  
Vol 19 (6) ◽  
pp. 1344-1361
Author(s):  
Isaiah Oino
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Financial Performance ◽  
Financial Institutions ◽  
Content Type ◽  
Loan Portfolios ◽  
Cent Level ◽  
Transparency And Disclosure ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of transparency and disclosure on the financial performance of financial institutions. The emphasis is on assessing transparency and disclosure; auditing and compliance; risk management as indicators of corporate governance; and understanding how these parameters affect bank profitability, liquidity and the quality of loan portfolios. Design/methodology/approach A sample of 20 financial institutions was selected, with ten respondents from each, yielding a total sample size of 200. Principal component analysis (PCA), with inbuilt ability to check for composite reliability, was used to obtain composite indices for the corporate governance indicators as well as the indicators of financial performance, based on a set of questions framed for each institution. Findings The analysis demonstrates that greater disclosure and transparency, improved auditing and compliance and better risk management positively affect the financial performance of financial institutions. In terms of significance, the results show that as the level of disclosure and transparency in managerial affairs increases, the performance of financial institutions – as measured in terms of the quality of loan portfolios, liquidity and profitability – increases by 0.3046, with the effect being statistically significant at the 1 per cent level. Furthermore, as the level of auditing and the degree of compliance with banking regulations increases, the financial performance of banks improves by 0.3309. Research limitations/implications This paper did not consider time series because corporate governance does not change periodically. Practical implications This paper demonstrates the importance of disclosure and transparency in managerial affairs because the performance of financial institutions, as measured in terms of loan portfolios, liquidity and profitability, increases by 0.4 when transparency and disclosure improve, with this effect being statistically significant at the 1 per cent level. Originality/value The use of primary data in assessing the impact of corporate governance on financial performance, instead of secondary data, is the primary novelty of this study. Moreover, PCA is used to assess the weight of the various parameters.

Cybersecurity and the new firm: surviving online threats

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vallari Chandna ◽  
Praneet Tiwari
Keyword(s):  
Risk Management ◽  
Data Privacy ◽  
Small Firms ◽  
Management Practices ◽  
Privacy Management ◽  
Privacy Risk ◽  
Entrepreneurial Ventures ◽  
Content Type ◽  
New Firm ◽  
Established Firms

Purpose Nascent firms and startups are often subject to challenges that their more mature counterparts can avoid. While cybersecurity is an issue that all firms contend with, it is especially challenging for new entrepreneurial ventures who lack the resources and capabilities of established firms. The purpose of this paper is to seek to delve deeper into the cybersecurity and risk management needs of small firms and startups. Design/methodology/approach Extant literature and available tools are explored to develop a usable framework applicable to small firms and new entrepreneurial ventures. Findings The liabilities of newness and smallness make entrepreneurial ventures a unique context in which to study the significance of cybersecurity and data privacy risk management. The authors offer an overview of issues and potential solutions relevant to entrepreneurial ventures. Research limitations/implications While offering practical insights, the work is a theoretical framework. The framework will enable researchers to develop more nuanced theory when it comes to cybersecurity and data privacy risk management. Practical implications The framework illustrates four distinct contexts for cybersecurity and risk management when it comes to the needs of small firms and startups. Adoption levels are explained, and small business operators and entrepreneurs can thus use the framework to determine the most appropriate approach for their enterprise. Originality/value The authors develop a framework illustrating adoption of different security and risk management practices by entrepreneurial ventures based on their specific needs and context. The authors thus offer practical solutions for startups and nascent firms regarding cybersecurity and privacy management.

Corporate governance and the social performance: investigation on Tunisian financial institutions

2018 ◽  
Vol 60 (6) ◽  
pp. 1412-1431
Author(s):  
Nejia Nekaa ◽  
Sami Boudabbous
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Financial Institution ◽  
Stock Exchange ◽  
Social Performance ◽  
Financial Sector ◽  
Content Type ◽  
The Social ◽  
Questionnaire Method ◽  
The Impact

Purpose The purpose of this study is to show the specificities of the corporate governance of Tunisian financial institutions and the impact of the internal mechanisms of corporate governance of these institutions on their social performance. It is therefore interesting to establish the existing relationship between these mechanisms of corporate governance and the performance of a financial firm. Design/methodology/approach This study aims to study the financial sector, generally characterized by its opacity, its regulation, its evolution and its obscurity. Therefore, a study based on the questionnaire method was recommended. The questionnaire is intended for managers. Therefore, the authors interviewed 138 managers of Tunisian financial institutions dispersed between agencies and headquarters in different regions (Gabes, Tozeur, Gafsa, Sfax, Sousse and Tunisia). Findings As a result, an impact on performance was observed according to the empirical study. Therefore, the authors can conclude an essential role of internal mechanisms for improving the social performance of a financial institution. The empirical findings in this paper lead to important conclusions. Indeed, the variables measuring the governance mechanisms have divergent effects on the social performance of the financial institutions subject to the sample. For the variables board of directors, confidence, culture, auditing, they have a positive effect. While, the incentive remuneration effect negatively the social performance. Originality/value This study will be based essentially on the financial sector in Tunisia: the credit institutions (22 banks), the establishments of leasing (eight companies of leasing), two factoring companies and two banks of cases which are listed on the Stock Exchange of Tunis (BVMT).

A proposed framework for implementing risk-based Shari’ah audit

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Suleiman Dalhatu Sani ◽  
Mustapha Abubakar
Keyword(s):  
Financial Institutions ◽  
Real Life ◽  
Financial System ◽  
Practical Work ◽  
System Stability ◽  
Illustrative Case ◽  
Content Type ◽  
Finance Industry ◽  
Islamic Financial Institutions

Purpose This paper aims to recommend a framework that serves as a practical work tool for conducting risk-based Shari’ah audit (RBSA) in Islamic financial institutions (IFIs). Design/methodology/approach Qualitative research method was used through critical in-depth content analysis of documented literature to generate deep insights, further supported with a hypothetical illustrative case study application of the framework on an Islamic bank, aimed at bringing the framework to a practical, near real-life scenario. Findings A robust RBSA framework has been developed which focuses on Shari’ah non-compliance risks to systematically and practically arrive at a rated opinion on the level of an IFI’s adherence with Shari’ah rules and principles as recommended by the Accounting and Auditing Organization for Islamic Financial Institutions, aimed to safeguard the IFI and promote financial system stability at large. Research limitations/implications Practical realities limited the study to the use of a hypothetical case study bank. Future researchers can apply the framework to a real case study of diverse IFIs for effective contextual recalibration in diverse jurisdictions. Practical implications This paper aids the development of both internal and external Shari’ah audit practice using the risk-based approach. Social implications The RBSA framework contributes to promoting public trust and confidence in the Islamic finance industry. Originality/value This paper has proposed this RBSA framework as a practical work tool for Shari’ah auditors in their engagements and regulators in promoting sound governance and financial system stability. It provides foundation for future researchers in the field.

scholarly journals Privacy-Preserving Process Mining in Healthcare

2020 ◽  
Vol 17 (5) ◽  
pp. 1612 ◽  
Author(s):  
Anastasiia Pika ◽  
Moe T. Wynn ◽  
Stephanus Budiono ◽  
Arthur H.M. ter Hofstede ◽  
Wil M.P. van der Aalst ◽  
...  
Keyword(s):  
Data Mining ◽  
Data Privacy ◽  
Process Mining ◽  
Personal Data ◽  
Data Transformation ◽  
Privacy Preserving ◽  
Sensitive Information ◽  
Process Data ◽  
Mining Community ◽  
Healthcare Process

Process mining has been successfully applied in the healthcare domain and has helped to uncover various insights for improving healthcare processes. While the benefits of process mining are widely acknowledged, many people rightfully have concerns about irresponsible uses of personal data. Healthcare information systems contain highly sensitive information and healthcare regulations often require protection of data privacy. The need to comply with strict privacy requirements may result in a decreased data utility for analysis. Until recently, data privacy issues did not get much attention in the process mining community; however, several privacy-preserving data transformation techniques have been proposed in the data mining community. Many similarities between data mining and process mining exist, but there are key differences that make privacy-preserving data mining techniques unsuitable to anonymise process data (without adaptations). In this article, we analyse data privacy and utility requirements for healthcare process data and assess the suitability of privacy-preserving data transformation methods to anonymise healthcare data. We demonstrate how some of these anonymisation methods affect various process mining results using three publicly available healthcare event logs. We describe a framework for privacy-preserving process mining that can support healthcare process mining analyses. We also advocate the recording of privacy metadata to capture information about privacy-preserving transformations performed on an event log.

Management accounting systems, enterprise risk management and organizational performance in financial institutions

2014 ◽  
Vol 22 (2) ◽  
pp. 128-144 ◽  
Author(s):  
Siti Zaleha Abdul Rasid ◽  
Che Ruhana Isa ◽  
Wan Khairuzzaman Wan Ismail
Keyword(s):  
Risk Management ◽  
Organizational Performance ◽  
Financial Institutions ◽  
Management Accounting ◽  
Enterprise Risk Management ◽  
Accounting Systems ◽  
Content Type ◽  
Management Accounting Systems ◽  
Enterprise Risk ◽  
And Control

Purpose – The purpose of this paper is to examine the linkages between management accounting systems (MAS), enterprise risk management (ERM) and organizational performance by examining MAS information characteristics that match ERM implementation and joint effects of MAS and ERM on organizational performance. Design/methodology/approach – The research method involved administering a questionnaire to 106 financial institutions (FIs) in Malaysia. The respondents were chief financial officers or staff members holding the most senior positions in the finance department of the institutions. Findings – The significant findings on the association between ERM and MAS show that implementation of ERM requires the use of sophisticated MAS information. ERM and MAS complement each other as both are integral to decision making, planning and control in an organization. The finding also substantiates the important role of ERM in enhancing non-financial performance. Research limitations/implications – This study covered only MAS as part of sub-control systems in an organization. Future studies could investigate the link between a more comprehensive management accounting and control system and ERM. Furthermore, this study used perceptual measures of MAS, ERM and organizational performance. Practical implications – The regulating body should promote best management practices of sophisticated MAS and ERM among FIs as these practices will create competitive advantage as well as help those institutions comply with regulations. Originality/value – This study has contributed to the body of knowledge on the linkages between MAS, risk management system and organizational performance.

scholarly journals A design-based approach to support and nurture open educational practices

2017 ◽  
Vol 12 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Shironica P. Karunanayaka ◽  
Som Naidu
Keyword(s):  
Belief Systems ◽  
Real Life ◽  
Two Dimensions ◽  
Educational Resources ◽  
Pedagogical Practices ◽  
Educational Practices ◽  
Process Data ◽  
Instructional Resources ◽  
Content Type ◽  
Open Educational Practices

Purpose A critical attribute of open educational practices (OEP) is the pursuit of open scholarship which comprises the release of educational resources under an open licence scheme that permits no-cost access, use, reuse, adaptation, retention and redistribution to others. The degree of openness in relation to this attribute will depend on the context and culture of the place and the people in it. When left to chance, the adoption and practice of open scholarship by educators is at best sketchy. For optimum impact, a design-based approach is essential. A central focus of such an approach will need to target educators’ belief systems and practices about their scholarship. Any such work will involve researchers collaborating with practitioners in real-life settings to improve educational practices through iterative analysis, design, development and implementation. The purpose of this paper is to report on how the development and use of such a design-based approach, implemented by the Open University of Sri Lanka, impacted the adoption and uptake of open scholarship among teachers in the Sri Lankan school system in terms of changes in their use of instructional resources, pedagogical thinking and pedagogical practices. Design/methodology/approach The study adopted a design-based research (DBR) approach (Reeves, 2006), which involved researchers collaboratively working with practitioners in real-life settings to improve their educational practices along three aspects – instructional resource use, pedagogical perspectives and pedagogical practices. Based on the four stages of the DBR approach – analysis, solution, testing and refinement, and reflection, a professional development intervention programme was designed and implemented to support teachers on the integration of open educational resources (OER) and adoption of OEP in their teaching-learning process. Data collected throughout the process using multiple strategies such as questionnaire surveys, concept mapping, lesson plans, focus group interviews, self-reflections and “stories”, were analyzed using both qualitative and quantitative methods. Findings By the end of the intervention, significant changes were observed in teachers’ use of instructional resources, their pedagogical thinking and pedagogical practices. While resource usage has shifted from no or low usage of OER to reuse, revise, remix and creation of OER, the pedagogical thinking and practices of teachers moved from a content-centric and individualized patterns to more constructivist, context centric and collaborative ways. The diffusion of OEP was prominent along two dimensions – enhancements in the individual practices in innovative OER use as well as collaborative practices of sharing of resources, knowledge and good practices. Practical implications The systematic and flexible methodology adopted based on the DBR approach via a framework designed as a contextualized, process oriented and a self-reflective enquiry has been very useful to support changes in OEP among practitioners over time. Originality/value This iterative process allowed the researchers to function as “designers”, while investigating real-life issues in collaboration with the practitioners through reflective enquiry to further refine innovative practices towards OEP. This provides valuable insights for improved design solutions for future interventions in similar contexts.

Leadership, governance and the mitigation of risk: a case study

2015 ◽  
Vol 30 (2) ◽  
pp. 132-159 ◽  
Author(s):  
Jim Rooney ◽  
Suresh Cuganesan
Keyword(s):  
Risk Management ◽  
Social Relations ◽  
Financial Institution ◽  
Single Case ◽  
Management Control ◽  
Management Decision ◽  
Content Type ◽  
Management Controls

Purpose – The purpose of this study is to examine how managers in financial institutions satisfy themselves of the effectiveness of risk mitigation strategy and management control. It studies the co-opting of accounting tools within a single financial institution case study, examining the recursive and emergent characteristics of risk management practice. Design/methodology/approach – Adopting a field study approach within the strategy-as-practice perspective, the paper provides insights into the role of actor perceptions of risk and accounting as a calculative practice in the adaptive enactment of risk strategy. Findings – Results highlight the interactions between risk management strategy, management controls and actor interests at Lehman Brothers. The actions and reactions of risk management decision-makers such as Executive Committee and Board members are examined to better understand the role of accounting and leadership. Research limitations/implications – Results of this study may not be generalised beyond this single case study. Practical implications – The paper emphasises that concern for the social relations and the performative interests of actors in a risk management network needs to be understood and considered in accounting research. It is argued that the market prices of tradable financial asset will continue to be opaque without these insights. Originality/value – This study explores an under-researched topic in the accounting literature in examining how management controls are affected by and, in turn, affect risk strategising.

Exploring novel Islamic finance methods in support of OIC exports

2016 ◽  
Vol 7 (2) ◽  
pp. 78-92 ◽  
Author(s):  
Ahmet Suayb Gundogdu
Keyword(s):  
Risk Management ◽  
Critical Realism ◽  
Financial Institution ◽  
Islamic Finance ◽  
Export Credit ◽  
Trade Finance ◽  
Content Type ◽  
Existing Structures ◽  
Finance Industry ◽  
Credit Agency

Purpose This paper aims to propose a new Islamic trade finance framework for Islamic financial institution (FIs) to support exports in Organisation of Islamic Co-operation (OIC) countries. Design Methodology Approach: This paper introduces and proposes the recently developed Islamic finance methods of the supplier financing Wakala agreement, restricted Mudaraba and award-winning Export Credit Agency (ECA) export finance structures from the aspects of Shari’ah compliance, efficiency, simplicity for traders and risk management. This paper uses the approach of critical realism. The three-stratum approach is appropriate for Islamic product development, where the real, the actual and the empirical can be observed. Findings: The author argues that the ECA export financing structures, or restricted Mudaraba if preferred, with an embedded supplier financing Wakala agreement can pave the way for Islamic FIs to support exporting companies. It is also concluded that development and support of the Takaful industry are vital for the success of Islamic export financing schemes because of its role in risk management. Originality Value: Although very active in import financing with standard Murabaha contracts, Islamic FIs are still not able to meet the need for financing the expanding exports of OIC countries. Because of the difficulty in developing products that are both efficient and Shari’ah-compliant, export financing is the most controversial issue for the Islamic trade finance industry. Existing or proposed export finance products are heavily criticised by concerned Muslims, as they include bill discounting, akin to factoring in conventional finance. This paper introduces methods aimed at overcoming the inadequacy of existing structures.

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