Case Study

Risk is defined as the possibility of a threat to exploit vulnerabilities which are found within information systems to cause harm and compromise data. Risk occurs in different types and they affect information systems differently depending on the vulnerability being exploited and there intended faction.

Risks in the industry financial sector in firms, such as Wells Fargo, are associated with the loose of client information, loss of financial proprietary information as well as the risk of fraud when their information systems platform gets hacked. For the research, risk on client information will be in focus as it is the most prominent form of risks that various financial firm face (McLaughlin, 2018). Risk towards client details occurs in the form of hackers, a systems glitch which leads to clients having a slow time accessing their funds and compromising of client information which can mismatch of vital client information leading to loses to the company.

Information and technology is an important aspect of Wells Fargo operations since it keeps all the records of its clients and tracking various transactions that the company makes with different stakeholders. One of the risks that the company faces is human error, since its employees are in charge of ensuring they key in the right information, every now and then, employees might key in the wrong information for a client and this can lead to the company information systems holding the wrong information pertaining to different clients. This makes it easier for people to commit fraud and embezzle funds from the bank (Willcocks, 2013).

Wells Fargo being a financial institution is repeatedly under threat by hackers and people trying to amend their financial situations which means that they need to ensure that their financial systems are safe and have no risks which can be exploited by any party. Being that the Wells Fargo is a major credit company, the company risks the loss of its client’s data if it happens to be hacked and also when clients provide their private information to fraudsters who use the information to conduct credit card fraud where they open up credit cards and lines using the client’s name.

In the recent past, Wells Fargo has been accused of opening up accounts for its clients without their consent which is major personnel risk which the firm used to increase their revenues but in the process ended up losing revenues through court fines and a reduction of its brand market worth. Information systems face internals risks as highlighted by this move and having information systems which would warn employees and the managers of the firm of various ethical violations would have helped the company to maintain its brand's and save revenue which it used to pay court fines and damages (McLaughlin, 2018).

Wells Fargo as a firm, uses various algorithms to invest in different projects to generate more revenue. The company faces risk as the client's funds are used to invest in the projects to ensure that the firm is able to cater for its operational costs. Since the algorithm is based on the internet, it can get attacked by different malware which would affect its performance giving the wrong results (Willcocks, 2013). The wrong results will mean that the company will be investing in projects which will not achieve the expected return and this puts the client’s finances at risk.

The risks are experienced by multiple financial firms which lead to the firms investing in more modern and updated systems which have been tested to have fewer bugs and to have fewer risks compared to the prevailing information systems. The financial industry tends to stay ahead of the market by investing and acquiring new technology to ensure that it does not comprised and the vulnerabilities are easily fixed since it is the financier of most economies.

References

McLaughlin, T. (2018, February 01). Wells Fargo loses big client after dialing up risk in retirement funds. Retrieved March 30, 2018, from https://www.reuters.com/article/us-wellsfargo-funds-texas/wells-fargo-loses-big-client-after-dialing-up-risk-in-retirement-funds-idUSKBN1FL5L5

Willcocks, L. (2013). Information management: the evaluation of information systems investments. Springer.

Stallings, W., Brown, L., Bauer, M. D., & Bhattacharjee, A. K. (2012). Computer security: principles and practice. Pearson Education.