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RiskON – Promoting the Further Development of Risk Management in Switzerland

September 08, 2024, by Reik Leiterer, data innovation alliance

The aim and motivation of the RiskON initiative are to promote the further development of risk management in Switzerland under the patronage of sminds AG/N9 House of Innovation, the program management of the University of Zurich, especially of the UZH Innovation Hub, including business partners such as Bank Julius Baer, LGT Bank Switzerland, Pictet, EFG International and the Association of Swiss Cantona Banks.

Actively joined strategic partners in 2024 were Swiss Financial Innovation Desk (FIND), Swiss Risk Association and the Innosuisse Innovation Booster Artificial Intelligence. The latter will allow for the practice transfer after the RiskON Hackthon – a practice transfer for co-innovation between banking representatives and students, guided by the UZH faculty.

The RiskON brought together professional risk expertise with enthusiastic young academics in the format of a ‘Risk-/Hackathon’ with the aims to provide concrete solutions for real challenges in non-financial, financial, and digital risks: at RiskON 2024, experience and youth, curiosity and established professionalism, commitment and openness met for the second time at the University of Zurich to jointly develop comprehensive and digital risk management solutions.

The RiskON 2024 had three concrete challenges with 15 teams and 53 students to work on and produced use cases and approaches for the banks involved:

  • Challenge-1 ‘Use of new technologies for risk events classification and analysis’
    Financial institutions, as part of their risk frameworks, are required to capture, investigate/analyze and report on risk events. Given the volume of such events, their handling and analysis may be cumbersome and resource intensive. So how to leverage new technologies to facilitate the classification of risk events and their analysis?
  • Challenge-2 ‘Fraud Risk Detection – How artificial intelligence can help’
    Fraud risk, external and internal, is currently among the top risks in the financial sector. Big data and the rapid development of artificial intelligence has, unfortunately, also contributed to that over the past few years. On the other hand, AI-methods can be efficiently used by banks for early detection of fraud risk. In this context, a pragmatic approach for using AI methods and tools as part of a fraud risk detection tool with a focus on Private Banking business profiles is required.
  • Challenge-3 ‘How can AI be leveraged and enabled to enable CRO employees to work more efficiently’
    By focusing on either completing counterparty due diligence questionnaires, enhancing the Anti-Money Laundering (AML) alert resolution process or streamlining, harmonizing, translating, and updating legal client forms using advanced analytics techniques, Optical Character Recognition (OCR), and NLP, ideas for improving, scaling and automating tasks performed by Chief Risk Officer (CRO) employees are needed (incl. considering the associated risks, limitations and implementation cost).

The participating, interdisciplinary teams were able to deal intensively with the challenges in advance and, after a brief introduction by the organizers and a description of the hackathon’s procedure, they moved to their break-out rooms to work on their projects. Here they were coached not only by the challenge owners, i.e. the finance institutions, but also by experts from the fields of finance, risk management and technology integration.

The following day – and for many of the participants after a rather short night – the results were presented separately for each challenge in front of a jury and discussed together with the bank’s representatives. All the results were consistently of a very high standard, both in terms of conceptual depth and technological implementation, as well as in terms of reflection on the challenges and basic understanding of the complex challenges worked on.

The award ceremony and networking aperitif took place in the center of Zurich – and gave the winners of each challenge the chance to present their results again in front of all participants and in a festive setting. In addition, the award ceremony dinner and the unofficial closing aperitif were used extensively to exchange ideas with the industry and research experts present – and to discuss possible next steps in the teams after this RiskOn experience.

For the winning teams, these steps are clear: the innovative solutions will receive funding and support to ensure practical implementation. Within six months, a Minimum Viable Product (MVP) or Proof of Concept (POC), showcasing the feasibility, viability and desirability of the ideas, will be put into motion. The innovation teams will also get the opportunity to co-author articles and white papers with UZH professors, gaining access to cutting-edge research, enhancing academic credentials and thereby allowing for academic transfer.

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