National Resilience: Risk Assessment and Resilience Report

This report provides a comprehensive risk assessment of the Commonwealth Bank, focusing on the challenges posed by the rise of digital money and the threat of cyber-attacks. The analysis utilizes a risk identification framework to evaluate both internal and external factors impacting the bank's operations and customer relations. The report identifies the development of digital payment platforms like Google Pay and PayPal as a significant risk, impacting the bank's customer base. It also highlights the vulnerability to cyber-attacks and data breaches as a critical threat to the bank's reputation and the security of customer information. To mitigate these risks, the report recommends developing user-friendly digital applications for instant payments and enhancing the existing blockchain technology to improve data security and transparency. The conclusion emphasizes the importance of these recommendations for maintaining operational efficiency and customer loyalty in a rapidly evolving digital landscape, reinforcing the need for proactive risk management strategies.

Running head: RISK ASSESSMENT AND RESILLIENCE
RISK ASSESSMENT AND RESILLIENCE
Name of the student
Name of the university
Author note

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Table of Contents
Part a: Risk assessment....................................................................................................................2
Part b: Identification and Recommendation....................................................................................3
Introduction......................................................................................................................................3
Risk identification............................................................................................................................3
Recommendation.............................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................8

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Part a: Risk assessment
The different risks that are encountered by the organizations in diverse environments
affects the operations and goodwill of the same. In this elation, the discussion will undertake an
assessment of the different risks that are encountered by Commonwealth Bank, Australia. The
assessment of the risks will be assisting the concerned organization in designing the operational
strategies for supporting the long term sustainability of the venture. The application of the Risk
identification framework has helped in identifying and segregating the different risks that are
encountered by the concerned organization. The framework assessed the internal and external
environment of the organization and thereby evaluated the risks.
Figure 1: Risk identification framework

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(Source: McConnell 2012)
The risks that are faced by Commonwealth Bank are related to development of digital
money and Cyber-attack. The risks have affected the capabilities of the organization in
retaining the trust and loyalty of the customer base. On the other hand, the external risks has
affected the capability of the concerned organization in maintaining the adaptability of the same
as per the technological changes and the interests of the stakeholders. The recent technological
developments have curtailed the capabilities of the organization in adhering to the financial
needs of the customers.
Part b: Identification and Recommendation
Introduction
Risks identification and mitigation forms an important part of the organizational
operations as it helps a business in maintaining the efficiency of the operations as per the needs
of the business (Buckby, Gallery and Ma 2015). In this relation, the Commonwealth Bank
encountered risks that might be mitigated in order to maintain the efficiency of then operations
and retain the customer base of the same. The discussion will aim at understanding the risks that
are faced by the concerned organization and the different steps that might be considered by the
same for mitigation.
Risk identification
1. Development of digital money

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Commonwealth Bank encounters a risk related to the development of the tech giants and
the digital money transfer mediums like Google Pay and PayPal. Allen and Powell (2012) stated
in a research that the advent of technology has helped in speeding up the financial transactions
through the applications which affected the interests of banks. The bank’s financial services
required a huge amount of time being a lengthy procedure. On the other hand, the digital money
transfer applications provided the customers with an opportunity of saving their time through
user- friendly interface (Podolak 2014). It affected the customer base of the bank through
minimal investments being made by the customers to the bank for supporting the business. On
the other hand, Paddrik, Anderson and Wang (2018) stated that the non-card payments that are
offered by the digital money transfer applications has attracted the attention of the customers due
to the safety of the transactions. It has affected the concerned organization in retaining the base
of loyal customers, which is a proficient risk for the smooth functioning of the enterprise. The
advent of technological developments has challenged the traditional operations that are
undertaken by the business.
Digitalization has resulted to the development of different user friendly applications that
allowed the customers to make online payments and carry digital cash which is secure (He et al.
2016). On the other hand, the fast- paced lifestyle is again a factor that supported the
development of e-payment applications. The processes that are undertaken by a bank are lengthy
and time consuming for making the payments (Acharya, Schnabl and Suarez 2013). It affected
the interests of the customers while making immediate payments for their needs. Therefore, the
lengthy procedure and the slow processing of the organizational operations have resulted to
switching of loyal customers towards the digital money applications. It has affected the business
of Commonwealth bank through loss of loyal customers. On the other hand, the digital payment

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options provided an all time security to the customers over the utilization of debit or credit cards,
which has also minimized the transactions of the concerned organization with the customers
(Tabak, Fazio and Cajueiro 2012). Therefore, the development of digital money applications has
affected the concerned organization through loss of valued and loyal customers.
2. Cyber-attack
Cyber attacks might affect the security of information that is held by the organization
resulting to degradation in the goodwill. It has been reported that cyber crime and data breaching
has grown by 7.3 % between the years 2016 and 2018 (Adams and Ferreira 2012). The data
breaches might affect the goodwill of the business and result to loss of trust and confidence
among the customer base of Commonwealth bank. The bank held different personal information
of the customers, which might be compromised through data breach. Therefore, the bank
encounters a high risk of data breach, which might affect the brand name of the business while
operating in diverse international markets (Xu et al. 2013). The trust and confidence of the
customers over the operations of the bank helps the same in maintaining the efficiency of the
operations.
Recommendation
1. Development of digital applications for making instant payments
The concerned organization might take steps to develop digital applications that are user
friendly while allowing the customers to make instant payments. The development of the new
applications will be helping the concerned organization in upholding the efficiency of the same
in retaining the customer base. The development of the digital application will help the
concerned organization in providing the customers with an option of making online payments,

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which is secured through passwords. Digital applications will help the organization in gaining a
competitive edge against the other digital money transfer competitors like PayPal. The
development of the digital money transfer application will help the organization in upholding the
efficiency of the line of product offerings as per the objectives of the business. The digital
application will be helping the concerned organization in providing faster financial support to the
customers as per the fast- paced lifestyle of the same. On the other hand, the development of the
application will help the business in providing the customers with the account information before
and after withdrawal, which will help the business in making the customers aware of the balance.
2. Improving the existing Block- chain technology
The improvements in the existing block chain technology of the bank will help the same
in reducing the risk of data breaches. The block chain technology is a decentralized core
structure, which shares information through a peer-to-peer (P2P) network (Podolak 2014). The
utilization of the block chain technology will be helping the concerned organization in upholding
the transparency of the operations while minimizing the chances of fraudulent activities.
Therefore, the utilization of the block chain technology will be helping the concerned
organization in safeguarding the information of the customers from being breached. It will also
help the business venture in maintaining the trust and loyalty of the customers to contribute
towards the competitive advantage of the same over the existing players in the market.
Conclusion
Therefore, it might be stated that Commonwealth Bank face different risks that might
affect the brand name and the loyalty of the customers. However, the research enumerated
different recommended actions that might be undertaken by the bank in order to maintain the

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efficiency of the operations while maintaining the loyalty of the customers as per the concerns
faced by the same. The recommended actions will be helping the concerned organization in
upholding the efficiency of the operations and retaining the customer base in the era of
digitalization.

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References
Acharya, V.V., Schnabl, P. and Suarez, G., 2013. Securitization without risk transfer. Journal of
Financial economics, 107(3), pp.515-536.
Adams, R.B. and Ferreira, D., 2012. Regulatory pressure and bank directors’ incentives to attend
board meetings. International Review of Finance, 12(2), pp.227-248.
Allen, D.E. and Powell, R., 2012. The fluctuating default risk of Australian banks. Australian
Journal of Management, 37(2), pp.297-325.
Buckby, S., Gallery, G. and Ma, J., 2015. An analysis of risk management disclosures:
Australian evidence. Managerial Auditing Journal, 30(8/9), 812-869.
He, D., Habermeier, K.F., Leckow, R.B., Haksar, V., Almeida, Y., Kashima, M., Kyriakos-Saad,
N., Oura, H., Sedik, T.S., Stetsenko, N. and Yepes, C.V., 2016. Virtual currencies and beyond:
initial considerations.
McConnell, P., 2012. The governance of strategic risks in systemically important banks. Journal
of Risk Management in Financial Institutions, 5(2), pp.128-142.
Paddrik, M.E., Anderson, H. and Wang, J.J., 2018. Bank networks and systemic risk: Evidence
from the national banking acts. Available at SSRN 2845123.
Podolak, G.D., 2014. Insurance for Cyber Risks: A Comprehensive Analysis of the Evolving
Exposure, Today's Litigation, and Tomorrow's Challenges. Quinnipiac L. Rev., 33, p.369.

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Tabak, B.M., Fazio, D.M. and Cajueiro, D.O., 2012. The relationship between banking market
competition and risk-taking: Do size and capitalization matter?. Journal of Banking &
Finance, 36(12), pp.3366-3381.
Xu, Y., Carson, E., Fargher, N. and Jiang, L., 2013. Responses by Australian auditors to the
global financial crisis. Accounting & Finance, 53(1), pp.301-338.

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