Domestic terrorists don’t wear pinstripes


Is it just me that is absolutely gobsmacked by this!?

Further evidence, of the lack of consistency and glaring inequalities. OK, we know that Regulators and Legislators see fit to ignore the scale of the crimes perpetrated by these banksters BUT for how much longer can any right-minded citizen stand idly by?

More (costly) regulation won’t change this culture but, CONSTRUCTIVE TRANSPARENCY can. And, in the process, reduce the risks associated with such behaviours.

Political and Financial leaders know that they are playing a very high stakes game and that there is a growing threat that ALL that they hold dear will, as a result of both their actions and inaction, come under threat. Would this go some way to explain the rate at which civil liberties are being stripped away across the Western world? I sincerely hope that such questions or suggestions don’t qualify me as a “domestic terrorist” because, as a mere citizen, anything could happen…

JPMorgan Chase has been sanctioned by US regulators for failures in its risk management operations after it lost more than $6.2 billion on a single credit derivatives trade. The sanctions follow the disclosure of significant losses in a large synthetic credit portfolio that was managed by the CIO. The botched bet – made by UK big fish Bruno Iksil – had managed to wipe out $51 billion in shareholder value before alarm bells started to ring at the bank’s head office in New York. Among other things, the Fed identified deficiencies in risk management oversight, modelling assumptions, audit and finance reporting and escalation to senior management. The OCC further found that the bank’s BSA (bank Secrecy Act) compliance programme had “critical deficiencies” with respect to suspicious activity reporting, monitoring transactions, conducting customer due diligence and risk assessment, and implementing adequate systems of internal controls and independent testing. Despite the criticism, JPMorgan Chase escaped with nothing more than a rap on the knuckles. No fines were levied by the watchdogs and the bank didn’t admit or deny wrongdoing in consenting to the regulatory orders

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Complexity underpins the top business continuity issues for 2013


The failings &/or shortcomings of conventional risk management are known but still it’s acolytes continue to peddle their wares and ignore the inconvenient truth…

Complexity is a recognised source of risk that their tools and techniques CANNOT identify or address…but, if the understanding of the issues is growing amongst Risk Managers, surely, it can only be a matter of time before the ‘power’ of Ontonix tools becomes fully appreciated.

“…the risks we all face as we go into 2013 are much more complex, and thus much more difficult to counter,” says Michael Davies, CEO of ContinuitySA, Africa’s leading provider of business continuity services.

In what has become an annual exercise, Davies and members of his executive team met late in 2012 to review their predictions for the year and ponder what the coming year might hold for risk managers.

“What became very clear is it has become almost impossible to consider individual risks without taking the overall risk into consideration,” Davies observes. “Globalisation and the profound connectedness between individuals, companies and countries promoted by technology means that risk, too, must be seen broadly.”

Bearing this observation in mind, Davies and the ContinuitySA team have identified the following set of six interrelated risks for 2013….

Complexity underpins the top business continuity issues for 2013 | ITWeb.

Insurance Industry:: Innovation, transformation or failure


If you have visited my blog before you will already know that I have spent some considerable time researching and commenting upon a wide of topics that, although many within insurance fail to see the connection, are related directly related to the insurance industry.

In truth, my work was initially prompted by concerns (a deep dissatisfaction may be more appropriate!) about how the insurance (particularly broking) operated: structure; culture; regulation; remuneration levels; use of IT; cover; pricing of RISK. It was only as I delved deeper into the subject matter, a form of ‘root cause analysis’ [RCA] – causality being particularly pertinent to insurance! – that I came to fully appreciate HOW DANGEROUSLY LIMITED the understanding and application of a probability-based assessment of risk truly was. Especially when the business environment has, fundamentally and irrevocably, changed.

If a future event will take place, it will do so irrespective of the probability that we may have attached to it. If an extremely  unlikely event will happen, it’s probability of occurrence is already 100%

Having been introduced to Complexity (by Dr Jacek Marczyk, Founder of Ontonix srl) and it’s relationship to risk and uncertainty my RCA led me to investigate from a (more rigorous) scientific and mathematical perspective. Eventually into the realm of the behaviour of Complex Systems and, inevitably, to Systems Thinking. Gradually, the understanding, that comes from viewing life and work through the Systems lens, revealed that much of what is wrong with Financial Services stems from unnatural interventions.

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Enabling and incentivising self-organised productivity


Whilst I confess to knowing little about Nemetics but I know enough about Complexity to appreciate the content of this excellent blog. It isn’t terribly different to what I (and my colleagues at Ontonix) have been saying and demonstrating since 2005.

The message for Business Leaders…Before you attempt to apply the tools and techniques of Business and Risk Management or feel inclined to refer to a book on Management from the 20th Century (with the possible exception of 7 Habits… or Principle-centred Leadership) you MUST gain a deeper understanding of the business system over which you preside”.

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Beyond Data Mining:: knowledge mining


We live in the digital age. The flow of data is truly impressive. Statistics inform us that each year we generate more data than the past generations did in decades. But the problem is that Information Technology (IT) has concentrated on simply automating old ways of thinking, creating bottlenecks and problems we didn’t even imagine, and not really inventing new processes or approaches. There is little innovation going on in the IT arena. But one thing is certain, we are drowning in data and we’re thirsty for knowledge…

Turn data into structure

Structure is the overture to knowledge. But what is knowledge? What is a “body of knowledge”? Setting aside ontological hair-splitting  we could say that a body of knowledge is equivalent to a structured and dynamic set of inter-related rules. The rules can be crisp or fuzzy or both. But the key here is structure. Structure is the skeleton upon which a certain body of knowledge can be further expanded, refined, modified (this is why we say “dynamic”). One could say that structure forms the basis of a model or of a theory. Today there exist many ways of extracting structure from data. Statistics is one way. Building models based on data is another. But because building models and mis-handling of statistics has contributed to the destruction of a big chunk of our economy, we have invented a new method of identifying structure in data – a model-free method, which if free of statistics and building models. A method which is “natural” and un-biased.

via Ontonix – Complex Systems Management, Business Risk Management.