Forging ahead in 2019 amid the turmoil

”Challenges are what make life interesting. Overcoming them is what makes life meaningful.”- Joshua J. Marine

Happy new year dear readers. I am sure you will all agree with me that the years 2017 and 2018 have been very challenging for many banks in Ghana. Gone are the days when business owners thought reports on risk events were not important because they may be just a list of small incidents. With all the bank collapses, forced mergers and acquisitions and consolidations, risk management has become the necessary evil that has to be contended with to forge ahead.

Small businesses have fewer resources to help absorb a risk than larger businesses — one substantial event can take down a small business that isn’t prepared. If you haven’t given risk management any serious consideration, it’s still early enough in the year to re-evaluate your business and its susceptibility to risk.

Random reflections in the past

If you are a financial services provider, whether an employer or employee, please allow me to ask a few questions across incidents that may have happened in your institution last year:

  • Was there a particular Teller who was recording constant cash shortages/surpluses and nothing much was done to him or her?
  • Did an employee abscond with customers’ funds because of lack of supervision and monitoring?
  • Were your CCTV cameras just white elephants in the branches? Were they used pro-actively or just to referred to after incidents had occurred?
  • Did you observe some hardworking employees who never wanted to go on leave? Give them a break, otherwise it can be a recipe for disaster!
  • Was a staff overly-friendly with a particular customer, and did not want anybody to handle that customer’s transactions? Are you aware that many money launderers are busy trying to make their laundered funds look legitimate?
  • Is the ratio of outsourced to regular staff highly skewed toward them?
  • Was there a high attrition rate in your organisation? Did many good employees leave the organisation to join your competitors?
  • Were the resources allocated to credit approval more than the credit analysis and monitoring?
  • Are there factions in your department/branch causing lack of teamwork?
  • Were there proper follow-ups on loan documentations, account opening and customers’ businesses?
  • Are incidents reported too late to management?
  • Are subordinates afraid to talk? Do they just sit quietly waiting for the leader to finish a monologue?
  • Do you know the lifestyles/personality of the staff in your unit? How do they fit into the roles they are playing?

Random Reminders for 2019

Let us look at few random reminders to managers to mitigate operational risk in 2019 and beyond:

  1. Institute a Structured Risk Management Plan

Since human capital is the foundation of risk management, why don’t you ensure all job descriptions for staff embed a risk management section? This can include clear, simple and measurable goals that staff can align with to establish a risk culture in the bank.

Too many staff blame their management with the usual complaint: “I did not know. It is not part of my job description”. If staff want to see everything in black and white, just give it to them and let it be a useful reference. Managing risk is everybody’s business. No more blame-games

  1. Business Leaders…Know Your Business!

Over-specialisation can sometimes be risky. Business leaders require appreciation of most functions in the bank to be more strategic in their thinking and decision-making. Silo-management of risk is dangerous and leads to unhealthy competition. It would be good to see business leaders meet regularly to strengthen their knowledge of each other’s functions and agree on risk factors to watch out for….

  1. Regular Communication

Regular communication is king when it comes to risk management! Many staff easily fall prey to risk by ignoring the little things that matter in their activities, therefore regular reminders and sharing lessons learnt help to reduce risk in the bank. Misunderstood or incomplete information spreads ambiguity and invariably affects execution of the bank’s plans. This often creates problems between teams and employees. Accurate communication has to be established and one-on-one communication has to be promoted between different teams

  1. Managers…engage your employees 

On this note, I will take a direct quote from an article posted in ‘Operational Risk Management’ by Brain Barnier:

“Don’t make the mistake of believing that a dictatorial management and an unquestioning workforce make for an ideal workplace. Instead, it is necessary to have frequent two-way interactions with your employees. Sometimes risks occur simply because they are not addressed by anyone. Employees are the direct links to business operations. Basically, they make the work happen and are the first ones to realise if something goes wrong or can be executed in a better way. So, give your employees ample space to openly address issues and freely state their suggestions.”

  1. Business and IT depend on each other

Without technology, the business of banking cannot thrive. Increased interdependency encourages a more integrated, performance-focused approach to IT-related operational risk management. Cross-disciplinary knowledge enhances understanding and the IT leaders learn more about “what the business wants”. Since all new banking products depend on IT, can you focus your product development on better understanding of business dependencies on IT, while IT leaders also get an opportunity to see “through the eyes of the business”.

  1. Risk is not Stagnant – Be Open to Innovative Approaches

Since banking is not static, Risk Managers should get outside the box and think more like Sales persons, while Salespersons should also think risk to make their goals more realistic. Increased understanding will enhance collaboration in product development of financial solutions for customers. Tap into the full range of innovative strategies for mitigating and managing risk. Can you take a closer look at your customers’ financial needs, resources and goals to determine the appropriate mix of products to accomplish their financial objectives?

  1. Be on the Watch-out for Cyber Threats and Social Media Risk

Although Social media benefits banks greatly, it also brings new risks to a bank. However, in our part of the world what is the literate population? Holding a mobile phone does not make a customer literate and banks must decipher the wheat from the chaff, while regular updates and security tips should be given to bank customers to avoid ‘phishing’, and hacking by cyber criminals. Let your customers know you care.

  1. More Risk-based Audits

Can banks embrace a transformational shift toward a more risk-based approach to audit? Although they report directly to the board, there should be a more inclusive role for auditors during product developments, operational manual updates and strategic decision-making. They have a ‘third-eye’, and that eye should be taken notice of. We must not wait for events to happen before we ask them to investigate. They should also be proactive and come out of their shells so they will be regarded not as mere policemen but also partners to prevent losses.

  1. Being Realistic

Set a Schedule. No goal is attainable without deciding when you’re going to make the small changes needed to reach that goal. If you set no schedule for yourself, or -as most people do – set an unrealistic schedule, you are setting yourself up to fail. The schedule should be written down, just like your goal, and the steps you will take to reach each goal.

Improving your risk management programme over the entire year is realistic; trying to do so overnight is impossible. If your schedule involves things which need to be done daily or weekly, set specific times of the day or specific days of the week you will use to work on it. Then do it, and keep written track of your keeping to that schedule. If you find a part of your schedule isn’t working, don’t be afraid to change it. The key is to stay flexible and adapt to changes needed to be successful in your goals.

  1. Don’t Be Upset by Setbacks

You may have heard the old adage “two steps forward, one step back”. This is often true for New Year Resolutions, which can often be the most difficult to keep.

Moving into a Brighter Future

Keeping these few simple tips in mind this New Year may help to increase your chances of success. Consider that the New Year is not only a time to make changes in your life, but also a time to see your past successes! On this note, I wish you a happy New Year, with risks properly managed, assets efficiently utilised, your deposit mix properly profit-worthy, and your staff more bubbly and loving toward customers to offer a better ‘financial marriage” with them…Amen to all that.


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.



Email: [email protected]  or [email protected]

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