Taishin FHC Corporate Social Responsibility Report 2019

9 About Taishin 0 Taishin Holdings implements procedures specifically to identify, manage and respond to emerging risks, and prepares assessment worksheets based on documents published by local and foreign institutions. All subsidiaries are required to assess emerging risks associated with their business activities to assess the possible impacts and devise response measures, which are consolidated by Taishin Holdings to facilitate ongoing monitoring on the effectiveness of risk control and mitigation measures. Taishin Holdings has designed assessment worksheets based on documents published by local and foreign institutions. Subsidiaries are required to assess impacts of emerging risks and devise response measures based on the state of their business activities. Based on subsidiaries' assessments, Taishin reports impacts and mitigation measures. Impacts and mitigation measures of identified risks are monitored on an ongoing basis. Emerging Risk Management of Emerging Risks Step Step Step Step Risk Identification Process Identification Assessment Integration Observation Risk Types Impact on Operations and Business Mitigation Measures and Response Strategies Opportunities New infectious diseases Deepfake and Internet of Things Attack Financial Technology and Industrial Transformation Risk and Opportunity Analysis ● New types of infectious diseases, without effective vaccines or drugs, affect the health of personnel. ● Due to globalization, diseases spread faster than in the past. These are no longer issues of a single nation or region, and countries all over the world must pay attention to it. ● Banks keep a large volume of confidential information (including but not limited to customers' financial information), which makes them a wanted target for attacks by hackers, who may use social engineering or deepfake attacks to deceive employees and cause network security breaches and confidential information leaks. ● The number and usage of IoT devices is continuously expanding. Hackers may leverage weak device security to conduct distributed denial-of-service (DDoS) attacks, which may cause business interruption. ● The FinTech era, emerging AI, cloud technology, big data, and other technologies as well as changes in customer behavior will impact current financial services. ● Digital technology is changing day by day, giving rise to new scams and counterfeit - ing methods. ● In the era of big data, the volume of confidential information is growing. If that is unfortunately leaked or stolen, our company may suffer significant financial losses and damage to its reputation. ● If an IoT breach leads to a DDoS attack and interruption of operations, and such a major accident is reported, our company may be subject to huge fines from the competent authorities. ● Our online operations must meet customer needs and preferences and comply with new regulatory requirements, to prevent negative impacts on our business growth. ● Carefully introduce financial technologies to prevent leakage of personal information and damage to customers’ rights and interests or penalties from the competent authorities. ● Improper handling of counterfeit cases will affect the company's credibility and image, and damage profits. ● Staff attendance will be affected ● If serious, some business may shut down. ● Shrinking economic activities have affected the profitability of credit grantees and the possibility of default payment has increased. ● Develop electronic remote working methods, carry out renovation of premises and replace equipment, and provide additional specialist training. ● Improve the company's resilience to new types of infectious diseases. After the market gets back on track, it stands ready to seize opportunities. ● During a crisis, besides maintaining profitability, we may step up our actions as a corporate citizen, protecting employee health and enhancing the company's reputation. ● The rapid housing economy has been affected by the epidemic. The Bank continues to combine digital technology to launch new products, online services and expand partners to actively expand digital business opportunities. ● Leverage optimized correlation analysis and financial big data to gain insight into the best marketing strategies and qualified customers and strengthen operational energy. ● Use financial IoT devices to work more efficiently and quickly, with cross-regional flexibility and faster turn-around times. ● Seize the opportunity for transformation, provide convenient financial services, build trust with online customers, and strengthen our core competitiveness. ● Leverage FinTech to optimize operation processes, improve data security control mecha - nisms, and improve service quality. ● Connect the open banking structure with third parties, to provide customized financial services and products. ● Implement in-house employee health management and reduce large meetings. Procure sufficient quantities of epidemic prevention materials to stabilize people's moods. ● Show care for the customer's situation and offer bailout measures when necessary to help them navigate the crisis. ● Strengthen asset quality monitoring and avoid excessive concentration in high-risk regions or industries. ● Regards to digital development : 1.Continue to use new technologies to optimize online processes, such as applying for personal consumer loans, credit cards, funds, etc. 2.Actively cooperate with home economy related industries (such as online shopping, food delivery) 3.Control the digital transformation needs of partner stores to promote the new payment platform of Taishin. ● Strengthen the collection, use, and supervision of confidential information and continue to keep employees informed of data security news and reinforce basic concepts of data security. ● Formulate the "Management Rules for IoT Suppliers" and set up a list of qualified equipment. Hire external consultants to conduct security tests, reduce loopholes in our IoT equipment, and formulate security control measures. ● Formulate FinTech-oriented development directions and develop new services and products. ● Strengthen FinTech financial services monitoring and management and strengthen our data security management system. ● Monitor anomalous transactions, implement identity verification mecha - nisms, and strengthen suspicious data comparison. ● Build the alliance with partners by connecting APIs, such as Pay + and Richart, which help financial services penetrating into customers' life scenarios.