Our Hurricane Risk Models Are Dangerously Out-of-Date

Last week, researchers at the University of California, Davis, overlaid FEMA’s flood-zone maps on top of satellite imagery of the devastating flooding around Houston after Harvey poured more than 40 inches of rain across the region.

The preliminary assessment found that two-thirds of the inundation occurred outside the federal agency’s 100-year floodplains, where there should be only a 1 percent chance of flooding in any given year. More than half of the deluge happened “outside of any mapped flood zone,” even including 500-year events, in areas that should face only “minimal flood hazard” . You can read more here.

Similar instances were observed when hurricane Katrina hit the US few years ago. The predictions went wrong because of the computer models relying on data which is of no relevance today.

Advertisements

COSO Issues Important Update to ERM Framework: First revision since 2004 addresses evolution of enterprise risk management

LAKE MARY, Fla. (Sept. 6, 2017) – The Committee of Sponsoring Organizations of the Treadway Commission (COSO) today released its highly anticipated ERM Framework: Enterprise RiskManagement–Integrating with Strategy and Performance. This new document builds on its predecessor, Enterprise Risk Management–Integrated Framework, one of the most widely recognized and applied risk management frameworks in the world. The updated edition is designed to help organizations create,
preserve, and realize value while improving their approach to managing risk.
The update, developed by PwC under the direction of the COSO Board, highlights the importance of enterprise risk management in strategic planning. It also emphasizes embedding ERM throughout an organization, as risk influences strategy and performance throughout the organization.
“The complexity of risk has changed, new risks have emerged, and both boards and executives have enhanced their awareness and oversight of enterprise risk management while asking for improved risk reporting,” said Robert B. Hirth Jr., COSO Chair. “Our overall goal is to continue to encourage a risk conscious culture.”
The first part of the updated Framework offers a perspective on current and evolving concepts and applications of enterprise risk management to meet the demands of an evolving business environment.
The Framework itself is organized into five easy-to-understand components that accommodate different viewpoints and operating structures to enhance strategies and decision-making. The update focuses on challenges and evolving expectations of enterprise risk management that business leaders and boards are dealing with in today’s landscape, including shifts in economic markets, evolving technologies, and changing demographics in supporting decision-making.
“PwC has had a long-standing relationship with COSO. Together, we’ve seen enterprise risk management redefine its importance to an organization,” said Miles Everson, PwC’s Global Advisory Leader and Engagement Leader. “The Framework addresses the evolution of ERM, the benefits that can be achieved, and the need for organizations to improve their approach to managing risk.”
“ERM is as much about understanding the implications from the strategy and the possibility of strategy not aligning as it is about managing risks to the implementation of the strategy and business objectives,” said Dennis Chesley, PwC’s Global Risk and Regulatory Consulting leader and Project Partner for the COSO ERM effort. “This update answers the call for a stronger emphasis on how enterprise risk management integrates from strategy through implementation and performance.”

Concluded Hirth, “There is no doubt that organizations will continue to face a future full of volatility, complexity, and ambiguity. Enterprise risk management will be an important part of how an organization manages and prospers through these times.” The document is available in printed form, e-book, on-line subscription and pdf licensing for large organizations, accounting and consulting firms. COSO also offers software application licenses and a training license fee arrangement. Additionally, COSO is planning for the Framework to be translated into several languages, including Chinese, Japanese, Spanish, and French among others.

For additional information, please visit http://www.coso.org.

About COSO
Originally formed in 1985, COSO is a voluntary private sector organization dedicated to improving organizational performance and governance through effective internal control, enterprise risk management and fraud deterrence. COSO is jointly sponsored by the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), the Institute of Management Accountants (IMA), and The Institute of Internal Auditors (IIA). For more information, visit www.COSO.org

UK not as keen on mobile wallets as mainland Europe and US

The UK is lagging behind other countries in mobile wallet adoption, according to a new survey out today.

Consumers in the US and Europe are catching up with those in fast-growing economies in Asia and Latin America where mobile wallets have already become the dominant payment platform, according to an online survey of 6,000 consumers in 20 countries worldwide sponsored by global payments software firm ACI Worldwide.

The research shows that 17 per cent of US consumers now regularly use their smartphone to pay, up from 6 per cent in 2014 when the survey was last conducted. In Europe, Spanish consumers are the most active users of mobile wallets, with 25 percent using them regularly, followed by Italy (24 per cent), Sweden (23 per cent) and the UK (14 per cent). Read more here.

Global payments software firm ACI Worldwide found that security concerns, while present, are not holding back uptake.

Steven Murdoch, a security researcher at University College London and authentication vendor VASCO, said that the situation with mobile payment security is mixed.

“In terms of risks, it’s far easier to compromise a smartphone than a card. Cards are simple special-purpose computers, engineered primarily for security, whereas smartphones are complex, general-purpose computers potentially running software from dubious sources.”