Qualitative risk management in the fight against financial crime

Season 6 Episode 11

Transcript

Juan José Ríos (host):

In an environment where threats evolve faster than statistics, perceptions, organizational culture, and expert judgment become essential tools for anticipating risks that cannot always be measured with numbers.

Welcome to Mundo Financiero Seguro, the Plus TI podcast.
I'm Juan José Ríos.

Today we will discuss how financial institutions are incorporating a qualitative approach to risk management. What signals can make a difference? And how is technology transforming the way we understand risk?

This episode aims to provide clarity, depth, and practical value to professionals who lead risk management. Get ready for an insightful conversation about how risk management can become a powerful ally in preventing money laundering and other financial crimes.

Today we are joined by two experts with extensive experience.
Marco Antonio Cabañas has more than 15 years of experience in the banking sector, specializing in money laundering prevention and internal auditing. He currently serves as manager of Fraud Management and Prevention at a bank in Paraguay.
And Jorge Diéguez, GRC Product Manager at Plus TI, with extensive experience in designing technological solutions for risk management, compliance, and corporate governance.

Jorge Diéguez:
Hello, Juan José. Good morning and good afternoon to everyone, depending on where you are listening from. As usual, I would like to thank our audience for their loyalty and for joining us for every episode we release on Monitor Plus. I would also like to take this opportunity to thank our special guest, Marco Antonio Cabañas, who is joining us for this edition with his extensive experience and professionalism.

Marco Antonio Cabañas:
Good afternoon, everyone. It is a pleasure to be here and share this space with you. I appreciate the invitation and the opportunity to discuss such an important topic as risk management and fraud prevention from a qualitative perspective. It is an honor for me to contribute from my experience and, above all, to learn together in this exchange.

Juan José Ríos:
When we talk about risks, we tend to think in terms of figures, indicators, or matrices. However, the first signs often appear in qualitative details: behaviors, patterns, and even intuitions. Marco, I'll start with you. How does operational risk management contribute to the early detection of qualitative signs of fraud or financial crime?

Marco Antonio Cabañas:
Operational risk management plays a fundamental role in the early detection of fraud because it allows qualitative signals to be interpreted that, in many cases, precede the occurrence of the event. Unlike financial indicators, operational risk observes human behaviors, processes, and conduct that can reveal vulnerabilities before an economic loss occurs.

In practice, many of the first signs of fraud do not appear in an accounting report, but rather in subtle signs such as unusual access to systems, repeated manual operations without justification, atypical requests for exceptions, inconsistencies between what is declared and what is executed, or repeated errors that reveal process or control failures.

When the operational risk area applies qualitative tools such as interviews, assessment matrices, incident analysis, claims review, and process indicator tracking, it can connect these dots and anticipate patterns that reveal that something is not functioning safely.

Every incident, no matter how small, should be considered an early warning sign. It is not a matter of viewing risk as an isolated event, but rather as part of a system where human, technological, or process failures can signal a greater vulnerability. The greatest contribution of operational risk is to transform qualitative signals into early warnings that allow for the strengthening of controls and timely action to protect the customer and the financial institution.

Juan José Ríos:
Jorge, based on your experience, what role do qualitative assessments play in the early detection of risks associated with financial crime?

Jorge Diéguez:
Qualitative assessments play a key role in the early detection of risks linked to financial crime because they allow factors to be identified that cannot always be measured quickly or accurately using traditional quantitative models.

There are frequent scenarios in money laundering and fraud prevention where risks have behavioral and cultural components that require interpretation rather than statistical calculation. For example, changes in the ethical behavior of a sector, decreased confidence in internal controls, or environmental pressures are qualitative signals that must be identified and analyzed.

These assessments allow us to capture what is known as the "voice of the organization": the perception of employees, gaps that are not always reflected in the data, and signals that quantitative models may overlook. It is not just a matter of forms or matrices, but of interpreting behaviors to anticipate incidents before they turn into economic losses or reputational damage.

Juan José Ríos:
Marco, how can an organization integrate these qualitative values into its operational risk management and compliance frameworks?

Marco Antonio Cabañas:
An organization can integrate qualitative values when it understands that risk is not only measured in numbers, but also in human and behavioral signals. Complaints, recurring errors, informal practices, customer doubts, or employee perceptions are indicators that, when properly analyzed, allow vulnerabilities to be anticipated.

For this to work, operational risk and compliance frameworks must create opportunities to listen to, document, and analyze these signals through interviews, self-assessments, lessons learned, fraud cases, and behavioral patterns. Integrating these values involves transforming the daily experience of staff into useful information to improve processes and strengthen prevention.

Juan José Ríos:
Jorge, how can generative artificial intelligence and behavioral analysis enhance qualitative risk management in the prevention of financial crime?

Jorge Diéguez:
Generative artificial intelligence and behavioral analysis have the potential to revolutionize qualitative risk management. They enable unstructured data, human perceptions, and behavior patterns to be converted into actionable information for decision-making.

Traditionally, qualitative assessments depended on expert judgment. Today, with artificial intelligence, it is possible to systematize that knowledge. For example, by analyzing large volumes of information such as audit reports, emails, or internal surveys, it is possible to identify sentiments, keywords, and red flags related to ethical pressure, noncompliance, or behavioral changes.

By combining machine learning techniques, patterns that previously went unnoticed are detected, such as sudden changes in interaction with systems, modifications in approval flows, or variations in transaction frequency. These qualitative signals can be transformed into risk indicators that are monitored continuously.

Juan José Ríos:
Marco, what role does collaboration between the areas of risk, fraud, compliance, and technology play?

Marco Antonio Cabañas:
Collaboration is essential because no risk can be managed from a single perspective. Fraud and financial crime arise in digital environments, materialize in operational processes, and are detected through unusual behavior.

Fraud identifies atypical patterns; operational risk analyzes human and process causes; compliance ensures regulatory and ethical alignment; and technology reinforces controls and continuous monitoring. When these areas work in coordination, each qualitative signal becomes valuable information for anticipating events with greater impact and strengthening a culture of prevention.

Marco Antonio Cabañas:
It is essential to foster a culture of institutional risk, continuously train staff, and align technology with human strategy. Artificial intelligence should be an ally of expert judgment, not its replacement. In addition, it is key to learn from mistakes, document incidents, and transform lessons learned into continuous improvement.

Jorge Diéguez:
Qualitative risk management represents one of the most important frontiers in the fight against financial crime. Integrating this vision as a structural part of the risk management framework, supported by technology and properly documented, allows scattered perceptions to be converted into strategic knowledge. However, the key will continue to be human judgment and the ability to interpret context in order to make sound decisions.

Juan José Ríos:
Today we understood that risk management is not just about numbers or algorithms, but also about intuition, observation, and organizational culture. When technology and human judgment work together, institutions not only detect threats: they anticipate them.

Thank you to Marco Antonio Cabañas and Jorge Diegues for joining us, and thank you for being part of Mundo Financiero Seguro, the Plus TI podcast, where we explore how innovation and human intelligence come together to build a more secure financial system.

I'm Juan José Ríos.
We will hear from you in the next episode.
Until then, let's continue building a more secure financial world together.