“Outstanding people have one thing in common: an absolute sense of mission.” – Zig Ziglar
Hello dear Readers, I hope you had a good week, looking at certain happenings in the branch with another eye, watching out for any red flags and attending to them to prevent any damage or loss. I also hope the examples of people risk cases discussed last week did not put you off, but rather set you thinking.
While some red flags are very obvious danger signals, there are certain happenings in the branch that many people do not associate with risk.
PEOPLE RISKS (Contd)
Apart from the personality red flags listed last week, other people risks continue to lurk in the dark corners of branch banking. Take a good look and ask yourself the following questions:
Staff Complement:
- What are the manning levels like?
- Do you have adequate numbers for each functionary in the branch?
- Are some key positions vacant? Without the requisite supervisors, a branch is in danger. Many frauds are seen to be perpetuated when the key supervisor is away on leave or absent, and when the back-up person is not well trained to take over.
- What is the ratio or number of temporary staff employed (include National Service Personnel and outsourced staff) to the permanent staff? There are serious concerns when most of the staff are on contract. Much as such persons do their best in the circumstances, the commitment levels sometimes leave much to be desired. After all, they do not have any job security, so why blame them? Moreover when they are not well treated by the permanent staff, it reduces their morale on the job.
- Is the branch top heavy? Do you have more Officers than Clerks? Is it a case of too many cooks spoiling the broth?
Level of Attrition:
- What are the attrition levels like?
- Are the permanent staff leaving the bank in large numbers?
- Why are they leaving and where are they leaving to? Is it to your competitor? If so, too bad, because they will go with your customers!!
- High employee turnover, accompanied by new staff and inexperienced management can easily lead to people taking advantage of the situation.
Gender and Age Balance
What is the gender and age balance like? There was a case of a bank’s branch where the staff complement was made up of fourteen persons, with only two persons, a clerk and the cash boy being men. A year down the line, three of the ladies had to go on maternity leave, leaving the branch crippled with a skeleton staff. There was another case where a branch manager made a special case for a better gender mix for his branch. Why? All the ten staff were men! The customers were wondering why and were getting bored with the same “hard faces”. It seemed funny but in branch banking, these supposedly little things matter. A fair gender balance creates continuity of work and reduces over-dependence on a few people. On the other hand, inculcating a team work and “comeradie” spirit encourages staff to help out in case of need without feeling the pinch too much.
What about the branch where every staff including the manager has the same educational background and graduated within the same period? Yes. It happens. The result? Peer rivalry, absent leadership skill, little respect for the manager who also feels too proud to “team play”, leading to chaos.
Unplanned Staff Leave
Do you encounter accumulated leave of staff running into months? Apart from emergency situations where management stalls staff leave for a period, leave is a period of rest as well as for reflections to ensure all is well and transactions being followed per the policies. Staff who avoid leave or even sick leave must be scrutinized. A block leave of a minimum of ten working days can refresh the staff and prevent many errors and frauds. Handing over procedures must be completed in all cases of staff movements and should be enforced by line management in accordance with he HR Policy and Procedures.
The Untrained Staff
It is said that two heads are better than one, but is it only about the head count? These days, there is another twist to that saying – “Two good heads are better than one”. There are some situations where the numbers do not matter much. What does matter is the quality of staff. A branch working with untrained and unknowledgeable staff is definitely sitting on a time bomb. An urgent on-the job as well as off-site training should be quickly arranged.
Unqualified Family Members and Cronies
As Africans, we have a firm belief in assisting family and friends in need. Let us look at the case where a person whose education has been financed by several relatives. How on earth can you say no to requests from relatives to employ other family members? This takes a leader with a strong sense of working ethics to say no. Of course, it has to be compensated for by giving them some financial assistance in other ways. Where family members, old school mates and cronies are employed, there are cases where some of them take advantage of their connected relations by misbehaving, leading to breakdown in discipline. Some branch managers are afraid of people with “connections” at the top. Such sensitive situations should be handled with diplomacy and tact while the staff in question is also counselled, to reduce tension and mistrust among the staff.
Dear Reader, I am sure you will agree with me in my assertion that people risks are the most critical of all the four main operational risks in banking. After all, the systems, procedures and external events are mostly created by people, which is the bank’s most valuable asset. A beautiful banking edifice without the right people to man the set-up and structures is like an empty shell or a white elephant.
Process Risk.
Another set of red flags in branch banking, called Process Risk. What is a Process? According to the Cambridge dictionary, a process is defined as “A series of actions you take in order to achieve a result”. Banking transactions pass through a series of processes in the customer satisfaction chain. For example, a computer process provides comprehensive, integrated solutions for banks, helping them to meet their business ambitions; – digitizing the enterprise, streamlining and automating operations, reducing costs, improving customer satisfaction, significantly enhancing processes and efficiency.
The typical bank branch processes comprise of a long list. Here are a few:
Staff training, account opening, cash handling and vault management transactions, cheque processing, credit appraisal and analysis, monitoring, recoveries, cheque requisition, Anti-Money Laundering, Customer service, feedback and recovery processes, electronic banking, security, and so on. At each point in the process, a variety of risk issues confront the bank, especially at the branch, hence the need for adherence to embedded controls. Before then, let me ask you a few pertinent questions that you may ponder over.
Points To Ponder
- Do you have manuals or operational guidelines for the various transactions carried out in the branch?
- Who owns the manuals?
- Is the manual “staff and customer friendly”?
- Are the processes applicable to the current systems and operations of the bank?
- Is it the property of the head of department who quickly shows it to visiting Bank of Ghana or other Regulatory officials, as evidence that the departmental targets are on course, but who unfortunately is not aware that they are not being used by the branches?
- Have relevant extracts been sent through the intranet or emails, or printed for staff to use?
- How are the instruction guides or new processes disseminated to end users? Does the manager understand the instruction/methodology before dissemination downstream? Is it something treated as “Ooh, as for this, it is for the Operations people, I don’t need to understand it, so long as the work goes on.”
- Do outsourced staff who have no email or are not on the official email list, been given extracts to read and even sign as having read?
- Has there been any concerns about some grey areas requiring review to make it more meaningful?
- When was the manual last reviewed?
- Was the manual written with an experienced and knowledgeable person involved to take care of risk issues or surprises?
I will pause here and continue with some helpful hints of how some process risks become red flags, in next week’s article. I will highlight on some process risk cases that rocked the boat in some branches of multinational banks across the globe. There is a saying that when your neighbour’s beard is on fire, you also have to fetch some water. Yours may be the next. Let us rather prevent these fires from affecting the enthusiasm and dynamics in the banking business.
TO BE CONTINUED
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:alberta@alkanbiz.com or [email protected]
Tel: +233-0244333051/+233-0244611343
