Risks of Implementing AI Systems in Organisations: Hard and Soft Risks
AI is a risk management project, not just an IT project Artificial intelligence has become part of everyday business in almost every industry. Banks use it for credit scoring and fraud detection, insurers for claims assessment, manufacturers for predictive maintenance, and hospitals for diagnostic support. Each of these applications brings benefits, but also risks that […]
Operational Risk Management (ORM)
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events. Operational risk is present in every aspect of business operations, from day-to-day transactions to strategic decisions made by governing bodies. The management of operational risk in banks in Bosnia and Herzegovina is based on the regulatory […]
Your home is Your most important company: The cost of ignorance and the Risks of Financial Illiteracy
Financial literacy is often reduced to knowing about interest rates, loans, and basic banking terms. In reality, it is a much broader set of knowledge and habits that shape how we plan, make decisions, take risks, and bear consequences. If we view the household budget as a small company—with income, expenses, reserves, investments, and risks—it […]
ICAAP & ILAAP Capital and Liquidity management
Capital and Liquidity Management in Banks The Internal Capital Adequacy Assessment Process (ICAAP) and the Internal Liquidity Adequacy Assessment Process (ILAAP) are key mechanisms through which banks ensure they maintain sufficient capital and liquidity to cover all material risks to which they are exposed. They represent integral components of a bank’s overall risk management framework. […]
AI and ML Risks: The New Role of the Risk Manager
Artificial Intelligence (AI) and Machine Learning (ML) are no longer a distant future—they are already part of business processes in banking, insurance, industry, and the public sector. They bring tremendous opportunities: better predictions, faster decisions, cost reductions, and the discovery of new patterns. But alongside these opportunities comes a whole new set of risks that […]
AI (Artificial Intelligence) and ML (Machine Learning): Mathematics and Risks
When reviewing the Global Risks Report from the World Economic Forum (Global Risks Report 2025 | World Economic Forum), it becomes clear that the global risks facing the world — and consequently every individual, whether a person or legal entity — are increasingly complex and interconnected. Among these, the newly emerging AI-related risks are becoming […]
Risk Culture-Key to Resilience and Long-Term Success
Why Risk Culture? Risk culture refers to the set of values, beliefs, knowledge, and behaviors within an organization that shape how its members perceive and manage risks. In a time of increasing regulatory complexity, rapid digitalization, and geopolitical instability, a strong risk culture is becoming a crucial factor for survival and development—both for financial institutions […]
CREDIT RISK MANAGEMENT
From Sound Credit Analysis to a More Resilient and Profitable Loan Portfolio Credit risk represents one of the most significant exposures faced by banks, and the quality of its management directly affects financial stability, capital adequacy, and the sustainability of the business model. Effective credit risk management goes far beyond assessing borrowers’ creditworthiness. It requires […]
MODEL RISK MANAGEMENT (MRM)
From Traditional Banking Models to Artificial Intelligence – Responsible Management of Models, AI Risks, and Outsourcing Models increasingly shape decisions that directly affect financial performance, capital, risk exposures, and trust in banks. Yet every model, regardless of its sophistication, carries risk. Banks rely on quantitative models, algorithms, and artificial intelligence (AI) systems across virtually all […]