beyond merely adopting new technologies. as board members, your role is to foster a culture that actively encourages innovation that is aligned with the bank's long - term goals. as members of the board you can guide the bank to innovate responsibly, ensuring that 1 / 5 bis - central bankers'speeches progress is steady, sustainable and compliant with relevant regulations. for this, the board needs to ensure that the necessary infrastructure, skills, and risk management frameworks are in place to support these innovations. while at times management may present an optimistic view, it is the board's duty to critically evaluate and question the narrative provided so that it has a clear, accurate understanding of the organization's true position and risks. 2. business model risk assessment an effective business model is fundamental to a bank's resilience and sustainable growth. there's no single " golden rule " for what a successful model should look like ; each bank must tailor its approach based on its specific risk appetite, market position, and strategic goals. while assessing the business model, it is essential to keep an eye on potential concentration risks. banks often gravitate toward particular sectors, segments, or products that appear profitable or " safe " in the short term. however, overreliance on any one area can lead to imbalanced exposures, making the bank vulnerable if conditions within that sector or product category suddenly change. to ensure a sound business model and avoid excessive concentration, boards might consider a few questions like a€ “ is our current model aligned with the bank's long - term strategy, and does it adequately consider our risk appetite? are we getting heavily concentrated in specific sectors, segments, or products, and if so, what mitigation measures / guardrails are in place? are we following industry trends that might not align with our unique strengths and risk tolerance? what strategies can we employ to ensure a balanced and diversified approach without diluting our core expertise area? the board's oversight should focus on fostering a business model that balances growth with resilience, preparing for both the highs and lows of the economic cycle. in an everevolving market, adaptability is crucial, and by keeping this consideration front and center, boards can guide their banks toward sustainable, long - term success. 3. heart of governance : risk management and data integrity now, i would like to delve into an area where effective governance is absolutely essential which is risk management

. in today's complex world, risks are no longer limited to just credit or market risks. as board members, your ability to make informed decisions depends heavily on having access to accurate, timely, and comprehensive data. one of the common issues we see is that of boards operating with outdated or incomplete data. imagine trying to assess a critical situation with only part of the pictureit's risky and can lead to poor decision - making. so, what is the solution? boards should champion data integrity initiatives, ensuring that robust data systems are in place that provide a holistic view of risks across the bank. real - time data can allow you to detect potential issues early, track trends in non - performing assets, or identify early warning signs in market or liquidity conditions. when it comes to risk, timely data isn't just a nice - to - have - it's an essential part of keeping your bank resilient. 2 / 5 bis - central bankers'speeches additionally, banks should think of stress testing as a tool that goes beyond regulatory requirements. these tests should be tailored to address a broad spectrum of risks, including operational, cyber, and liquidity risks. regular, well - designed stress tests allow your bank to not only respond to but also anticipate potential crises. 4. customer centricity this brings me to another important aspect - customer centricity. we have spoken on this in detail in the past as well. even at the cost of repeating, i would urge all of you to focus on customer service aspects of your bank, because this is one area that will attract substantial supervisory focus in the coming months and years. high standards of customer service are not just expectations ; they are obligations you owe to those who trust you with their money. boards must ensure that the banks'service delivery embodies empathy and fairness, particularly toward vulnerable groups like senior citizens who often encounter hurdles in accessing banking services. it is concerning that in many cases, customer grievance mechanisms, including the internal ombudsman structure, are treated more as a formality than as a robust, effective resource. the internal ombudsman mechanism should be more than words on paper ; it should operate with the spirit and diligence necessary to resolve issues impartially and promptly. boards should work towards building customer - centric banks where every individual, regardless of age, income, or background, feels valued and respected. customercentric governance should be evident in every