Evolution of CCM / Genesis

Breaking news in the front cover of the newspaper flashed “A British Bank goes bust, declared insolvency” underneath was a line tagged which read “Founded in 1972, British merchant bank held an account belonging to the Queen” in 1995. A person single handed made the bank broke. No, it wasn’t overnight, it was manipulated over a period. From 5 years from the great fall there goes another scam “The America’s most Innovative Company” was manipulating the revenues for six long years. It’s more than 25 years now, since the incident, what has the industry learnt? “Complacency the greatest risk! Are there any takeaways from the lesson learnt? Answer is a big “No”, there were many scams succeeding it and still ticking!

The history of scams and the time taken to unearth it, set pace to the heralding of the new concept called (CCM). We can ponder on what is CCM and things it can do!

What is CCM ?

CCM is a technology-based solution/ergonomic solution to continuously monitor processes and help customers to transition from traditional sample-based testing models to economical and effective monitoring of full population. CCM empowers and enables the first line in their smooth performing of their operations, while retaining transparency and audit trail. The trail in turn, allows the second and third line of defence to monitor first line activities, thus eliminating redundancies in testing and associated costs. CCM can be used in variety of sectors like Retail, FMCG, Health, Construction, IT etc.

The Fourth Industrial Revolution

We stand on the brink of the revolution that will shake the fundamental existence of the way be carry on things. The first industrial revolution used water and steam power to mechanise production. The second industrial revolution used electric power to create mass production. The third used electronics and information technology to an automated production. The fourth industrial revolution, a digital revolution which is not merely a continuation of the third but a distinct one, in terms of velocity, scope and the system impact occurring since the middle of the last century. It's a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. Compared to the previous industrial revolutions, the Fourth is evolving exponential rather than at a linear pace. Its not only about smart and connected machine and systems, but the scope is much wider from nanotechnology to quantum computing.

Inexorable shift from simple digitization to innovation based on combinations of technologies

Artificial Intelligence is one of the key technologies in the sweeping transformation of the economy apart from the Interest of Things (IoT), which connects the physical and the digital worlds, Co-bots specially designed to interact physically with humans in collaborative environments, Big data allows changing data into information, a massive data management and interpretation for business purpose and finally 3D -4D printing which can develop prototypes.

Impressive progress has been made during the recent years, driven by exponential increases in computing power and by the availability of vast amount of data, from software used to discover new drugs to technology which can predict and learn with the trend of data.

Indeed, across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution are having a major impact on businesses. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. The newer technologies make durable and resilient assets, while data and analytics are transforming how they are maintained. This revolution is forcing companies to re-examine the way they do business.

Nexus between Emerging technologies and CCM?

The emerging technologies along with it brings the rising risks, changing regulations and compliance costs which pushes to ponder on solution to the organisation. Organisations are looking at maturing their control environment from reactive model to more real time continuous monitoring techniques, which CCM bridges the gap perfectly.

CCM helps the business to ensure that its policies, procedures, cross system transactions and operational controls are operating effectively, efficiently and achieving their function continuously because “Trust is not a control, Trust but verify!”

How does a CCM work?

Based on a pre- defined rule set by the management, CCM technology identifies the transactions as anomalies which exceeds the threshold and produces a report of exceptions. These exceptions would be reviewed by more than one reviewer and if they are not reviewed within a specified time, it would be escalated to an escalated reviewer and finally closed by an independent reviewer and archived for future reference.

Today enterprises are moving from rule-based exception reporting CCM solutions to solution which provides actionable insights, in terms of dynamic dashboards, centralised monitoring, management reports like understanding of data, costs, ratios, insights, trends, behaviour, which will enable a behavioural enterprise-wide change and prevention of fraud internal and external party. The solution should be developed and maintained keeping in mind the importance of ensuring completeness and accuracy of the dashboards and reports used by various users of this solution. This will include business operations (First line of defence), management (Second line of defence) and auditors (Third line of defence).

Birth of Intelligent CCM

AI powered CCM intakes simulation data to train a Machine Learning (ML) model to make real time predictions possible throughout the data in review. Using ML, CCM becomes an Intelligent CCM as it not only predicts but learns over the period with enormous variety of transaction the business produces by anticipating anomalies and identifying red flag transactions.

Myth busted on CCM’s

Takeaways

Traditional exception reporting CCM’s have given way to New Era CCM’s

Doesn’t require complex test. Funda is “Keep it simple”

ML Models are very affordable with open-source tools.

Involve the business users early.

CCM is not almighty. To build a value based CCM requires proper insight of the business problem.

Use of storyboards and Dashboards to communicate

Way forward

Today, organizations are focused on optimizing processes and improving customer engagement. As CCM continues to be influenced by innovative technologies, it is vital for organizations to evaluate the role those digital communications can have on business transformation and the ultimate future of work. This maturity model provides a framework for that evaluation.

The technologies such as machine learning & AI, teamed with CCM can be powerful duo to help predicting, identifying potential anomalies in the real time and appears to a more dynamic solution and can be the new torch bearers of the CCM’s primary goal.