Risk Watch with Alberta Quarcoopome: THE CLOSING BELL… end of year preparations by banks

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Risk Watch with Alberta Quarcoopome: THE CLOSING BELL… end of year preparations by banks
Alberta Quarcoopome
  • “You’ve got to make your team have value, innovation and vision”…. Jack Ma

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. Here are some reasons:

  • 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 arrange 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!
  • 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 for their Christmas shopping.

Wealth Acquisition

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. 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. 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 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.

Fraud Prevention

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.

Meanwhile please book a copy of my new book, “THE MODERN BRANCH MANAGER’S COMPANION” a 440 paged book with 29 chapters of technical as well as soft skills in banking. It involves the adoption of a multi-disciplinary approach in the practice of today’s branch management. It also shares invaluable insights on the mindset needed to navigate and make a difference in the changing dynamics of the banking industry. Call 0244333051 for your copy.

Until we meet again, have a Merry Christmas and a happy new year.

ABOUT THE AUTHOR

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

CONTACT

Website www.alkanbiz.com

Email:[email protected]alkanbiz.com  or [email protected]

Tel: +233-0244333051/+233-0244611343

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