ORM ERM Web Seminar Session 2: Emergent Behaviors in Complex Financial Systems

Date & Time: August 5, 2025 2:00PM - 3:00PM ET

 
When Information Technology (IT) intricately connects with and inside time-critical Operational Technology (OT), the global Media & Social Media Echo Chamber, Mark-to-market Balance Sheet values and Stakeholder responses, it harbors Emergent (aka unpredictable) Behaviors that manifest severe, often irreversible consequences. As the U.S. 2023 National Cybersecurity Strategy reminds us:
“…Too often, we are layering new technology onto already intricate
      and brittle systems at the expense of security and resilience.”

Complexity has, in effect, Become a New Technology Adversary
Emergent behaviors can arise from minor user actions, environmental factors, equipment failures, or systemic timing instabilities. Adversaries can identify the fragility in such complexity & exploit it with seemingly harmless and hardly visible intrusions. Current software does not seek or detect these conditions. Incident responses are often too late, presenting challenges beyond the scope of conventional cybersecurity methods, tools, and practitioners.

Global Financial Systems are not immune - In 2007, Lehman’s global, high-speed counterparty risk of CMO sales, trading and clearance platforms conspired to exacerbate the 2007 financial meltdown. As Artificial Intelligence (AI), Distributed Ledger Technology (DLT) and quantum computing integrate into complex Information Technology and Operational Technology (IT-OT) mosaic, emergent behaviors will abound, and ransomware can flourish with pernicious consequences.

(How) can hidden risk be managed for Operational Resilience & Enterprise Value protection?
1. Emergent behaviors can be revealed and associated enterprise exposure measured.
2. Their risks can be localized to inhibit risk propagation and provide tamper evidence.
3. Enterprise Risk Management (ERM) can triage resource allocations and incident responses commensurate with actual enterprise & stakeholder exposure.