Why is this important? Why is this important? Vulnerability to cyberattacks and data breaches can potentially expose sensitive customer information, such as financial data, personal details, and transaction history. Inadequate data privacy practices or internal security breaches could lead to unauthorised access and misuse of customer data, facilitating fraudulent activities, identity theft, or targeted marketing campaigns. Non-compliance with data privacy regulations may result in substantial fines, legal action, or even the suspension of operations. Vulnerabilities in software and systems can result in unintended data breaches, even when secure systems are in place. Risks Credit risk: Directly affects the financial performance of our customers, through additional capital expenditures, potential imposition of fines or increased costs of operations and management. These may also include instances of newer or stricter environmental regulations. Market risk: Volatile and downward market valuations and repricing of investments held by the Group. Liquidity risk: Significant withdrawals or drawdown of committed facilities to fund recovery from severe weather events. Operational risk: Disruptions to operations and/or supply chain due to severe weather events. Risks Prioritise data privacy and security through a comprehensive strategy. Implement key security measures, including secure messaging, device binding, and a kill switch. Make substantial investments in advanced fraud detection to combat fraud effectively. Our Approach Manage climate-related risks through the Group Enterprise-wide Risk Management Policy. Prioritise projects aligned with the UNSDGs through rigorous due diligence. Work closely with clients to improve their environmental practices and conduct climate risk assessments to enhance our portfolio resilience. Our Approach Implement clear and concise data privacy policies that are easily accessible to customers. Engage in open communication with stakeholders about data privacy practices. Tackle concerns related to data collection, bias, and transparency in AI usage. Opportunities Identify green financing opportunities and direct investments towards climate-positive economic activities. Prioritise risk-weighted financing choices and proactively mitigate potential negative impacts from climate change. Guide clients towards more sustainable business models and offer tailored financial solutions that support their transition to a just economy. Develop our own internal expertise in climate risk assessments. Opportunities In today’s digital landscape, data protection is a strategic imperative. Prioritising robust security and proactive breach prevention fosters trust and responsible data practices, enabling sustainable growth in a privacy-conscious world. Business Context We are committed to mitigating climate change and building long-term resilience by actively managing our climate-related risks and opportunities. This proactive approach not only reduces our exposure to climaterelated risks and our environmental impact but also positions us to capitalise on emerging green markets. Business Context DATA PRIVACY AND SECURITY CLIMATE RISKS AND OPPORTUNITIES For more information on Data Privacy and Security, please see pages 159-161. For more information on Climate Risks and Opportunities, please see pages 161-169. 55 1 2 3 4 5 6 7 8 9 www.bankislam.com MANAGEMENT DISCUSSION AND ANALYSIS – STRATEGIC REVIEW
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