There is nothing wrong with staying small. You can do big things with a small team. – Jason Fried
Dear Readers, I wish to crave your indulgence to repeat this article which was first published in December, 2015….
PREPARING FOR THE CLOSING BELL
For financial institutions, December is a period for re-strategizing their operations for the coming year. They do not wait for the new year before they examine their budgets, cash flows, staffing and all other outstanding operational issues. The usual questions asked during strategic meetings are:
- What is the capital structure like?
- What was the target deposit level? Is there a positive or negative variance?
- What are the causes for the variances?
- Where were we last year?
- Where do we want to go next year?
- How do we get there?
- What are we doing right?
- What are we not doing right?
- What are the causes of any losses incurred?
- What has been done about it to prevent those occurrences? What lessons have been shared?
- What is the position of the loan portfolio? What is the Non-performing loans (NPL) structure? How do we recover the bad loans or agree on impairment levels?
- How about the human capital? Do we have the requisite staff competencies to achieve the objectives of the institution?
- If not, what programs are slated for the new year to correct any anomalies?
- What are the competitors doing? What is the feedback from the Market/Business Intelligence Unit?
- What is happening at the shop floor? What are customers saying about us? How well do we respond to customer complaints? What strategy should be adopted to retain loyal customers and win new ones?
- What products are being developed for the market? Are they in sync with the needs of the target market?
- What about reward systems? Are they transparent and objective enough to motivate the staff?
These are just a few of the tall list of questions asked and discussed at strategic meetings. Of course they go with long presentations, trend analysis and optimistic projections and with these, management feels good that the institution is well positioned to close the year on an optimistic note. Staff are asked to stay put and leave supposed to have been exhausted so that the manning levels are at their peak to meet the numerous transactions around the Christmas season.
The Related Stresses
As Bank management explores ways to close the year well, the staff are reminded of their job descriptions, targets and benchmarks. Many bank staff, especially those in sales and marketing find themselves going through a lot of stress to meet the targets. However we must admit that December is not a good month for deposit mobilization. Why am I saying so? There are several reasons. Let us look at a few:
- Whatever deposits that have been accumulated by customers, find their way back into the customers’ purses during Christmas and New Year festivities. OH what a blow to the Sales staff!
- Branch managers go crazy when several large withdrawals are made a few days before Christmas. Surprisingly many people prefer to hold cash in their wallets as if the world is coming to an end. The vaults are emptied of their contents. Some managers have to go chasing their head offices to make large withdrawals from their accounts held in Bank of Ghana! Mind you, it should include a lot of mint or new notes. Ha..ha. Why, “Ghanaman”. What is the essence of saving? Save money only to “chop” all at Christmas and start the new year with loans again? The woes of the human being. Do we ever learn?
- December is a season of love. What with the numerous engagement and wedding ceremonies. Sometimes, we say there is no money, but come and see wealth being displayed at these parties. Of course the engagement and dowry envelopes contain brand new notes from the bellies of the Bank of Ghana vault! Well, vanity at its best, but of course it is great to love and be loved and also show your love to your loved one, in-laws and everyone around. “Aware So, oooo”, (happy marriage) to all couples.
- Our Uncles and Aunties, the cocoa farmers, fisherman and other agriculturists from the rural community….This is their season to also rush to the big towns to do their shopping. They also withdraw most of their monies held at banks, susu companies and from under their mattresses to shop for fine clothes, bags, shoes, suitcases, bicycles, and electrical gadgets. They also say to themselves…” Money sweet, we too we de chop some”. It is God who protects them from the snares of the confidence tricksters in town. Most of them do not know their way around town and are always being harassed by the “419” fraudsters. Everybody has a strategy in December, whether good or bad.
- If you doubt the Christmas or New Year frenzy, just watch the “mummy trucks”, articulators, coaches and so on filled with passengers on Christmas Eve plying the highways in Ghana, when most city dwellers travel home with their “goodies”. Their faces are usually covered with sweat, yet full of smiles and expectancy…Home sweet home.
We should not run away from the fact that everyone wants to be successful at what they do. Apart from genuine workers and customers who prepare well to spend Christmas in ways they want to, there are a few bad nuts among bank staff as well as external parties, who get bolder as the year approaches its final days, to stack illegally gotten funds to squander.
As the excitement grows with the coming of the year end, there is so much emphasis on acquiring material wealth. One question to ask is: how do they acquire these “Valuables”? There are many genuine people who save with financial institutions. Some employers also give bonuses to their staff at the end of the year. For people who have earned their money through genuine means, I say “ayekoo” to you. Whatever you receive, a good name is better than ill-gotten wealth.
THE UNDERWORLD STRATEGIES
Just as bankers strategize before the end of the year, the Underworld also holds their own strategic meetings to explore the weakest links in banks, companies, homes and offices to strike their “gold” to enjoy at the end of the year.
The Underworld is a no-go area. However you will be surprised to know the kind of persons who deal in these nefarious activities. It includes a few bank staff who have still not been caught in the act. At this juncture I will like to issue reminders on some operational risk prevention strategies that I have been discussing in my earlier articles:
The Bank Internal Fraudster
These are a few of the internal fraudsters’ strategies:
- Stealing customers’ cheque books or cheque leaflets to make counterfeits or use in fraudulent withdrawals.
- Diverting customers statements to third parties to facilitate visa racketeering.
- Divulging customer information to third parties to benefit from and use in fraudulent actions on their accounts.
- Deliberate wrong payment to third parties who withdraw money transfer funds, to benefit from their tips.
- Facilitate impersonation of beneficiaries of cheques.
- Creating mixtures and shortages in currency notes being paid out to customers.
- Using the same utility bills to open accounts for different customers, in order to meet sales mobilization targets.
- Wrong re-structuring of facilities due for impairment.
- Granting unauthorized overdrafts to customers, in order to benefit from them.
- Demanding gifts from customers to meet their cash flow projections.
The External Fraudster
These people exude wealth and are confident in whatever they do. Such persons have studied the banking operations in detail. It is even alleged that some of them have acquired mastery of even the banking software being used, sometimes with internal assistance, cheque book printing company staff, customers’ employees, telecom staff, and so on. These are allegations which sometimes the law enforcement agencies even find it hard to resolve and prosecute. The external fraudsters operate an intrinsic network that results in customers’ cheques being cloned and paid to impersonators.
As the master strategist of fraud is on the look-out, let me also repeat some end of year bank strategies on risk and fraud awareness and prevention. There should be a war against such persons by some of the following:
- Reminders to staff on fraud prevention through circulars, emails and intranets.
- Strict observation of clear desk policy.
- Supervisors to scrutinize transactions that are unfamiliar and not in relation to the type of account.
- Beware of new account holders who look strangely in a rush to acquire ATM and Visa cards and electronic banking facilities.
- Avoid encouraging customers with incomplete KYC documentation from running the accounts and collecting cheque books.
- Beware of Business accounts being opened by some persons in the absence of the other Directors of the company.
- Conduct a detailed scrutiny of Letters of Administration and Probates for asset disposal of deceased customers.
- Prevent diversion of bank loans by customers, into the acquisition of other assets.
- Enhanced vigilance and call over and checking of vouchers.
- CCTVs in operational areas to be monitored on real time basis and back-ups properly stored.
These are only a few things to remind financial institutions to close the year in one piece and not in pieces. I wish that this month of December moves smoothly for all financial institutions so that they reap the fruits of their labour and close the year on a good note.
Until we meet again, have a good week.
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Chartered Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations and fraud.