The Power of Collaboration: …working together to fight risks in banking (1)

“Coming together is a beginning, staying together is progress, and working together is success.” – Henry Ford


The Power of Collaboration

I strongly believe that if there is one thing we need most in this world it is collaboration, at every angle of man’s endeavours. It is such a powerful tool that it brings out success in every endeavour an institution or individual undertakes. One cannot walk and work alone.


Collaboration among Banks in the midst of Competition 

On the banking side, just as the competition gets stronger, I advocate that the collaboration should also be stronger. What is the common enemy in banking? Risk leading to losses, of course. No bank wants to incur losses. There are too many customers ‘robbing Peter to pay Paul’, causing bad loans and losses in banks. With the recent emergence of various types of financial institutions, another battle is emerging as customers of Universal banks, Savings and Loans companies, Micro-finance Companies play football with each of these institutions.


One of the old practices we have in banking after account opening is the Bankers’ Opinion requests or Reference. It is the practice whereby bankers freely answer status enquiries directed to them by other banks and certain trade protection societies. It helps the new bank take protective measures when handling the new account holder. Banks used to rely on these to sift out the bad customers in the banking system, but these days the practice seems to have gone to the woods. Why?


Bank Managers are no longer interested in responding to them because they do not want to lose a ‘valuable customer’. Valuable indeed! It is when he has used one bank’s funds to start operations in another bank and refused to repay your loans that you will really “know the customer”. The Credit Reference Bureau has come in to assist banks in knowing the creditworthiness of borrowing customers – but the Bankers’ Reference is also a unique tool among bankers and should not be thrown away.


No two Incidents are the same


Since banks are human institutions, the uniqueness of man is always obvious even in managing risks. You may notice this from your bank’s risk register: no two risk incidents are the same. The risk may have been the same except that the people in a branch or department handled the cases differently, even though they are trained to handle it in a specific way. Eventually the incidents follow some similar patterns, from which a trend analysis can be deduced and decisions taken on how to mitigate them and not necessarily eliminate them.

The Need for Multi-disciplinary knowledge 

Since risk is an everyday issue in all departments of a bank, there is a need for multi-disciplinary knowledge to appreciate these risk issues. Nowadays, our global education system is training people to be specialists with deep but narrow subject matter expertise. It is therefore the working knowledge that helps complement one’s ability to fight the various risks in banking.

Problems in the new financial industry are complex and demand multi-disciplinary knowledge. Not just knowledge disciplines, but in addition Risk Management should be made up of a bank staff team that has multi-cultural and multi-ethnic sensitivity to customers and their team members. It is therefore imperative that staff work in teams which bring together heads with skills and knowledge which complement each other to manage risk. This reminds me of a joke from a colleague banker, Dr. Kofi Anokye Owusu-Darko, who does not totally believe in the saying “Two heads are better than one”. He joking prefers “Two good heads are better than one”.

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Combining Technical expertise with People-skills

It is a common phenomenon to see departmental heads with great technical expertise get embarrassed when risk incidents occur in their departments. Why does this happen? Sometimes some heads allow their personal egos to get in the way, hindering the group from achieving its desired results. Without training in people-skills, some heads feel they alone have the magic-wand to turn around a department’s fate for the better – forgetting that it is teamwork that achieves those goals. Supervisory and leadership skills always ensure that a winning team is built to own and embrace the task ahead and face the risks ahead.

People management is not the preserve of the Human Resource Department. After providing you with staff, the HR head does not have daily interaction with your members – and it is in working together that their various personality traits evolve. A head of department is the HR Director for that particular department, and people matters usually discussed at departmental meetings should normally be resolved there. A head of department who always reports subordinates to the HR department or to Management needs some people-skills training to mature and be in control.

It is common to see subordinates rebel against such supervisors, and even close their eyes to obvious risks looming in the department or branch. There are numerous cases wherein Assistant Branch Managers have closed their eyes to a potential risk unfolding at a branch, only for it to explode. Such persons also do not progress on the job because they are not involved in the managerial scheme of affairs.

The Electric Stove vs Gas Cooker Syndrome in Risk Management

Let me tell you a true story that happened in the 1990s at a bank. A bright young man (I will call him Kwame) was transferred to a branch to be its new branch manager. This was during the introduction of computers into the banking system. With his expertise in technology, he was able to adapt quickly to work with the system. He was an officer from another branch who had very credible academic qualifications, including an MBA. and was ready to ‘conquer the world’. In fact, all eyes were on him to wave the magic-wand and turn around the branch from a loss-making one to a profit centre.

There was one thing that the HR of management did not take into consideration – preparation for the transition of an Officer to Manager, without even going through the Management trainee level. Moreover, Kwame was quite temperamental and believed everything should be done with the power of a button, like turning on the gas stove for immediate firing. On the other hand, his team included persons with slower adaptation skills but who were very experienced in traditional banking operations. Their approach to work, although quite methodical, was slower in nature.

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Although Kwame had all the technical attributes, he had very little people-skills to work with most of the staff. His first perception was that they were jealous of his sudden promotion, and quickly got two of the older staff he was uncomfortable working with transferred from the branch. Two factions then emerged in the branch: those for the Branch Manager and those for the Assistant Manager. To make matters worse, Kwame was not very well-versed in banking operations, and he could not get the support of Paul, the Assistant Manager.

Matters got worse as Kwame spent more time in his office instead of walking about and seeing what the staff were doing. Many back-office transactions referred to his desk looked like Greek to him. He felt too proud to ask the data entry staff and instead just signed many vouchers without having thorough knowledge of what he was signing.

One day, some back-office staff decided to play a prank and embarrass the Manager by preparing an impersonal voucher containing wrong transactions on the bank’s general ledger accounts – which could cause even the manager to fall into trouble. This was during the time when branch managers were out of sight of staff and customers, and always locked up in their huge armchairs in their spacious offices. One had to see the Secretary before approaching the branch manager. Immediately he signed the voucher, the data entry clerk collected it and returned to the back office laughing and waving the voucher for all the staff to see. It was the intervention of one of the neutral staff, who decided the dangerous game was over and the branch should discuss their differences and collaborate, that saved the day. From that day, staff meetings were held to thrash out all personality and ego issues. The gas cooker and electric stove decided to work together.

I will stop here for now. See how your people-risk thermometer is faring and we will meet on paper next week with more cases of people-risk issues which require proper management in order to curb losses to the banks. See whether you can identify persons exhibiting the gas cooker and electric stove syndromes in your office, and make an effort to neutralise the two.  Remember, two good heads are better than one.




Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case studies for training young bankers in operational risk management, sales, customer service, banking operations and fraud.



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