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The Risk Lands On Her Desk

What a bank CFO can teach any leader about AI risk

Banking is one of the most regulated, risk-averse industries there is, and it's being pushed to work like a fintech. That makes it a good place to watch how cyber risk is changing for everyone else. Anna Kincannon, CFO of a financial institution and the first guest on The Catch, has spent nearly her whole career in banking. In her industry, risk rolls up to the CFO, so when something goes wrong, it lands on her desk. 

Most of the hard problems she described to Brian Gallagher and Kami Thompson came down to people: how they use tools, who gets hired, and what leaders will admit they don't know. 

In this episode:
Kami Thompson
SVP of Operations (Security & IT Solutions), Koniag Tech
Brian Gallagher
President, Koniag Cyber
Anna Kincannon
CFO, Heritage Bank NA

The Risk Lands On Her Desk: What a bank CFO can teach any leader about AI risk

The Catch Podcast

0:00

Know which risks you're taking back 

Most smaller banks don't run their own technology. A handful of core providers do, all the way to the online banking login a customer sees, and the core carries much of the risk with it. 

At a previous bank, Anna's team built its own digital banking experience in the cloud so the bank could own the customer experience and its data. The board had to accept that if something went wrong, there was no third party to hand it to. The risk team couldn't map NIST controls written for legacy applications onto AWS, and engineers using open source turned into hours of meetings and a trip to the board. After months of conflict with the CISO, the bank hired a Digital Information Security Officer who understood digital systems well enough to write a framework that fit. 

Any company that brings a platform or an AI tool in-house takes back risk a vendor used to carry. It helps to know which risks those are before you take them on, and who will interpret your controls once you do. So much depends, Anna said, on "who's sitting on the risk at the risk table." 

Train people before you lock tools down 

When Anna's bank paused AI tools until training was ready, she worried about what employees would do instead. People were already using AI. With the approved tools switched off, the work could move to personal computers and phones, and customer information would go with it. 

Kami heard the same concern from a CISO at a large manufacturing company during Grand Rapids Tech Week. He didn't want to be the blocker, because employees who are locked down find their way to personal accounts he can't see. 

Anna's rule is "We want to fix the behavior, not the tool." When a tool brings risk, teach people to use it properly. Brian added that the same goes for leaders, since an executive who won't admit a gap is a risk too. 

The rule covers bots as well. Someone asked Anna's IT team to set up an AI bot with email access and a name like Copilot bot number one. She wants bots to have real names. Brian calls this non-human identity: an AI account gets the access controls you'd give an employee, including limits on what it can reach and who it can write to. 

Ask who's responsible when a customer's bot moves the money 

New AI personal assistants can pay a customer's bills, warn them when money runs low, and move funds between accounts once the customer hands over a username and password. Anna sees the appeal, since it would save people a lot of time. Brian doesn't want a bot anywhere near his money, and JPMorgan has already moved to keep outside AI agents away from customer data. 

Anna's team is asking whose job it is to tell customers what they're agreeing to. If a bot moves money from savings to checking or opens an HSA, would the bank even know? Brian pointed out that a customer who loses money will blame the bank anyway, even when the customer clicked the buttons and a third-party tool did the rest. 

Anna's test for customers is short: "Would you give your username and password to a stranger?" A business in any industry can ask a version of it about its own systems. If a customer's AI agent started acting inside them, would you notice, and who would own the result? 

When Brian asked what a breach caused by AI misuse would cost, Anna named the financial hit first and reputation second. She asked listeners to picture a news story about bots descending on a bank and moving money around, and to ask themselves whether they'd keep their accounts there. 

Hire for the skill and teach the business 

Anna is open about what she doesn't know, including how security differs between the free, mid-tier, and premium versions of the AI tools her employees might sign up for. She calls it the iceberg effect, and she'd rather walk into a room and say she doesn't have every answer. 

Banks prefer people with banking experience, but as Anna put it, "there's no one with banking experience now that has cyber and AI background." So she hires for cyber and AI skills and teaches the banking, starting with a 300-page regulatory document. Remote hiring since COVID lets a small community bank find people it would never find locally. Brian has run into the problem from the HR side, in job postings that ask for years of experience in AI skills that didn't exist two years ago. His test is whether a candidate can learn and keep up. 

Keeping those hires is harder. A new expert often starts by telling the organization what it's been doing wrong, and leaders who work hard to do the right thing take it as criticism. Anna asks leaders to set their ego aside and let the new person teach them. "It's not that we did something wrong, it's just we did the best we knew how to in the moment." 

Anna's catch 

Every guest on The Catch gets the same closing question: if listeners changed one thing today to become more cyber safe, what should it be? Anna's answer was "Be open to learn, and it's OK not to know something."