When it comes to financial assets, cryptocurrency is the wild west. It’s still new and largely misunderstood, but its potential is huge. Unfortunately, the misconceptions surrounding cryptocurrency, particularly Bitcoin, leave many who could benefit from diving in. This is one of the many topics covered by Timothy Peterson in GSBLSU Junior class, “Introduction to Digital Assets for Bankers.”

Bitcoin Myths:

1. Bitcoin is mostly used for illegal activity – Although there have been concerns about bitcoin being used for illegal purposes, less than 1% has been known for illicit activity. Of that 1%, it was not used for money laundering, trafficking, or other criminal purposes.
2. Bitcoin is anonymous – Bitcoin is completely traceable on a public blockchain. All that is needed is an IP address associated with a wallet
3. Bitcoin is a bubble -The spikes and dips in Bitcoin are due to price manipulation by bots, not by people.
4. Bitcoin is a Ponzi scheme – A Ponzi scheme promises quick returns to investors of a non-existent enterprise. Bitcoin investors are ensured no such returns. In fact, its value is notoriously inconsistent.
5. Bitcoin is an inflation hedge – Bitcoin has no correlation with short and long-term inflation.
6. Bitcoin will replace Sovereign Currency – Cryptocurrency is unregulated and highly controlled by institutions or billionaires, unlike sovereign currency that the government regulates.

There is a 1 in 960,000 chance of getting struck by lightning, and a 1 in 220 chance of dating a millionaire. The chances of experiencing a data breach? 1 in 4.

Long gone are the days when you did not have to worry about a cyber-attack on your organization. No matter the size of your bank, you are at risk. It’s not a matter of if, but when a breach will occur. Today, more than ever, it is imperative to have the correct processes, technology, training, and people in place to best protect your organization.

The first step to mitigating cyber-attack risk is understanding the types to which you are most susceptible. Threats like hackers, ransomware, phishing, corporate account takeover, and ATM compromise are just a few of the myriad of breaches an organization could experience. Identify which of these pose the greatest threat to your institution and customers. Then, put into place the following practices to ensure you are ready and equipped for a data breach when it occurs.

1. Train Bank Employees to Identify Potential Data Breaches

The only way employees will know about risk is if they are trained and tested to identify it. It isn’t enough to simply talk about risk. Risk awareness needs to be an ingrained part of the corporate culture, from the top down. Employees must be encouraged, empowered, and equipped to do their due diligence in seeking out potential threats, and they must understand the critical role they play in preventing potentially catastrophic data breaches.

It is also important to keep your customers in the loop. Keeping them abreast of your bank’s risk awareness procedures and policies will ultimately create a deeper sense of trust and transparency between bank and customer. They want to know their data is safe and what you plan to do to keep it that way.

2. Establish clear processes

A formalized and clear plan must be created for what the guidelines are in different risk situations. Every step, from the moment a breach has occurred, should be established and clearly communicated.

Governance Frameworks like NIST, ITIL, and COBIT need to be established from the beginning.

3. Use the correct technology

Having powerful technology to protect the data of both your bank and customers is important, but something that is even more crucial is making sure that employees are trained in how to use it correctly and to its full potential.

If your bank’s employees, processes, and technology are not working together, there will be a greater chance of a data breach. While risk may not be imminent, establishing a risk awareness framework for your organization needs to be done immediately to protect your bank’s data as well as that of your customers.

This is just a snippet of the teaching of Chad Tagtow, CISSP in his GSBLSU class, Risk Management & CyberSecurity.

The senior class of the Graduate School of Banking at Louisiana State University annually participates in the program’s Bank Management Simulation course.  This computer-based curriculum is specifically designed to recreate decision making and management scenarios in certain banking areas like funds management, investments, asset and liability management loans, and risk management.  This year students were able to travel to Baton Rouge, Louisiana to participate in the 2021 session.  Due to Covid restrictions on LSU’s campus, students stayed and studied at the Renaissance in Baton Rouge.

The graduating class is divided into teams for this simulation.  Each team is responsible for overseeing the operation of an $800 million bank, with effective management and profitability being the key focuses.  BMSim, the computer model on which this assessment is based, provides rapid feedback on future decisions that these students make for their hypothetical bank.  The critical considerations when making decisions in this simulation include: competition, regulatory constraints, and the current economy.

The BMSim condenses two year’s-worth of bank operations management experience into a two-week program.  The results of this program are examined by state and federal regulators on a quarterly basis. Upon course completion each team is graded on a variety of factors, such as: consistency, organization, earnings, their ability to report to shareholders, and ultimately how well their bank is positioned for future profitability and success.

The winners in each simulation are recognized, along with their home bank’s president and CEO with a letter and certificate of recognition honoring their outstanding work during the Bank Management Simulation.  We are pleased to share the team winners that were announced at graduation on June 2, 2021.

SIM	NAME	EMPLOYER	CITY	STATE
A1	Samuel C. McCord	Merchants Bank of Alabama	Cullman	AL
A1	Samuel Jared McCullough	First Commerce Bank	Lewisburg	TN
A1	Donald E. Quintana	Hancock Whitney	New Orleans	LA
A1	Steven A. Rogers	The Piedmont Bank	Peachtree Corners	FL
A1	Alicia M. Rudd	Mid Florida Credit Union	Ocala	FL
A1	Jon-Michael Trimm	Trustmark National Bank	Ridgeland	MS
A1	Ryan M. Waddle	Peoples Bank	Mooresville	NC
B2	Ramsey R. Diament	Hancock Whitney	New Orleans	LA
B2	Chad S. Hancock	Bank of America	Charlotte	NC
B2	Cal Thomas Hodges	BankFirst	Brookhaven	MS
B2	Michael J. Leonard	Paragon Bank	Memphis	TN
B2	Alan Lunsford	Kentucky Bank	Richmond	KY
B2	Rochelle Dawn Mallett	JD Bank	Westlake	LA
B2	Kyle Stewart Morgan	Crews Banking Corporation	Lakeland	FL
C5	Jeffrey Daniel Baker	Mid Florida Credit Union	Ocala	FL
C5	David A. Brown Jr.	Trustmark National Bank	Huntsville	AL
C5	Charles Warner Cannada	Origin Bank	Ridgeland	MS
C5	Leanne Drapeza	Hancock Whitney Bank	Gulfport	MS
C5	Ryan E. Haydel	B1 Bank	Houma	LA
C5	Jonathan Henry Pope	Exchange Bank	Milledgeville	GA
C5	Owen C. Shirk	Fourth Capital	Nashville	TN
C5	Misha Jo Wilson	Farmers National Bank	Lebanon	KY