Leadership in the digital enterprise

Just as the computer journalists were summing up 2003 and warning about escalating hazards from increased malicious cyberspace contaminations in 2004, Mydoom.A and its variant Mydoom.B struck and broke all records for speed of infection. The worm was also the first to be blamed for slowing response times on the Internet due to congestion.

When hackers, competitors or governments apply the right technologies, the data you thought you had destroyed, and which has stumbled outside the corporate gates on discarded PC hard disk drives, backup tapes and other zombie media, comes alive again. Opportunists are quick to use this data to extract their pound of flesh.

When the Basel Committee on Banking Supervision got involved trying to put together some rules on capital calculations with the current Basel II initiative, they defined operational risk management as "direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events." Peter Keppler, a senior analyst in Risk Management on the Capital Markets team at Financial Insights, an IDC company, offers his perspective from more than 14 years of experience in financial services and risk management.

Of the top 1000 global financial services institutions, 80 per cent have no automated operational risk solution, 16 per cent use vendors and four per cent have it in-house, according to a report released last October by IDC's Financial Insights.