Risk Watch with Alberta QUARCOOPOME: Target setting in banks- the need for a balanced approach (2)

Target setting in Ghanaian banks is a double-edged sword: while it drives performance and growth, unrealistic targets often create pressure that can lead to misconduct, poor customer service, and reputational risks. Experts in Ghana emphasise the need for balanced, achievable targets tied to long-term sustainability rather than short-term gains’

Dear Readers, how do you find last week’s revelations? I am sure some of it stirred some emotions in you, especially the part that mentioned the sources as well as the  effects of pressure from some  targets that may be unrealistic and unbalanced. Not forgetting the unethical acts by some bankers who may be pressurized to outperform, causing stress and burn-out. The landmark example of Wells Fargo bank in US is always a reminder.

Why Target Setting Matters in Ghanaian Banks

Let us come nearer home and examine how some local banks are faring in their strategies for business growth. Strategy sessions usually start during  the last quarter of the year and usually  end with firm resolutions by the board and top management to enhance business growth. The following are some of the consequences:

• Performance Measurement: Targets to help banks track deposit mobilization, loan disbursement, and profitability.

• Strategic Alignment: Ensures staff efforts align with overall corporate goals.

• Motivation: Clear targets to inspire employees to achieve more.

• Accountability: Provides benchmarks for evaluating staff and branch performance.

The above measures, when taken should have a positive impact on the business, but sometimes we see the following negative impacts.

• Ethics: Sales quotas prioritized over customer needs.

• Short‑Term Gains: Boosted revenue temporarily but faced massive regulatory fines later.

• Employee Pressure: Staff fear job loss or missed bonuses if they didn’t hit the numbers.

• Customer Harm: Mis‑selling, hidden fees, and risky products eroding trust.

• Customer Distrust: Aggressive sales tactics erode confidence in banks.

• Scandals: Global cases like Wells Fargo show how target pressure can lead to fraud and reputational damage

• Burnout: Employees face stress and disengagement when targets are unattainable.

Targets vs. Risks

Target Pressure Area	Intended Outcome	Scandal Risk
Cross-selling goals	Higher product penetration	Fake accounts, mis-selling
Loan disbursement	Increased revenue	Risky lending, defaults
Deposit mobilization	Stronger balance sheet	Manipulated figures
Customer acquisition	Market expansion	Unauthorized accounts

The Balancing Act

Let us examine some typical roles and how target setting can be done with a more balanced approach.

A Relationship Manager has been given the following targets

• Open 200 new accounts per month,

• Achieve Ghc10M in loan disbursements per quarter

• Reduce Non performing loans to five percent

• Increase deposits by 40% year-on-year,

• Ensuring 95%+ customer satisfaction,

• Have zero regulatory breaches.

A Relationship Manager was found to be culpable in her dealings. She mis-sold products. She promised an SME customer that if she opened an account with the bank, she could facilitate transfers of $200,000 to her suppliers in China, without any documents! Borrowing customers also complained that there were some hidden charges on the loan facility granted, which made their facilities more expensive.

Recommendation- A more balanced approach by both parties

• Balance Growth with Risk: Avoid chasing deposits or loans at the expense of credit quality.

• Customer-Centric Goals: Focus on service quality, retention, and satisfaction—not just numbers.

• Management should adjust targets quarterly based on market conditions and economic shifts.

• Management must train staff on compliance and customer-centric principles.

Top Management

The following strategies are recommended with the full involvement of all business heads

• Tiered Targets due to branch disparities:: Differentiate between large urban branches and smaller rural ones due to the differences in types of customers, environment as well as socio-economic conditions. Urban branches outperform rural ones, making uniform targets unfair.

• Seek the employee well-being, motivate them to perform to reduce stress, burnout and attrition.

• Loyalty programs: Reward long-term customers and deepen relationships. Such programs naturally enhance customer loyalty and advocacy.

v.  Data-Driven Banking: Analytics for growth: Use customer data to identify profitable segments.This is a more scientific way of enhancing business growth.

• Predictive modeling: Customers’ needs should always be predicted before cross-selling products.

• Customer experience strategies result in strong loyalty and retention. This requires cultural change and staff training.

• Regulatory compliance: Banks must align growth strategies with evolving financial regulations.

• Economic uncertainty: Inflation, interest rate changes, and global shocks can impact growth and therefore necessitates regular periodic review of targets.

• One critical area to watch are talent gaps which requires the recruitment and retaining digital-savvy professionals.

• Competition: Both traditional banks and fintech disruptors are vying for customers. Banks should collaborate more with fintechs in their product development and meet the competition squarely.

Advice to bank employees

Are you stressed and burned out from the demands of the job? I hope that this article has created awareness about the causes of pressure on you. Please be mindful of the nature of business that your bank is doing. Banking is the most regulated sector of the economy. Your institution is taking care of the finances of the whole country and Bank of Ghana as the regulator, is expected to be in check always. Banks cannot work autonomously without regulation. I have also listed the positive impact that target setting has on your role. It is recommended that you seek clarity and guidance before you dive into the numbers set before you. I urge you also to take the following steps as you continue on the road map:

• Before you complain, seek clarity from your leader. He or she may also have a good reason.

• Don’t quickly assume that your boss doesn’t like you or wants you to fail.

• There might be good reason behind the targets.

• Check yourself again. Perhaps you possess certain qualities that have been identified, making you a good candidate.

• After seeking clarity, conduct a SWOT analysis of yourself, your environment. Do you have the requisite human and technical resources to achieve them? If yes, ask for it. If not, update yourself! Are you a good researcher?

• Do you need a self upgrade? There are several online programs you can learn from. Remember that the bank can only train you for a period at its convenience. If not, you can be quietly relieved of your schedule. You know the implications. Identify the skills directly tied to your targets (e.g., communication, time management, technical expertise). Invest in learning—online courses, mentorship, or practice sessions.

• Seek guidance and assistance from colleagues and supervisors and you will be surprised. Prayer helps.

v  Mindset & Motivation: Cultivate resilience: setbacks are part of growth.

• If the targets have caused medical concerns, seek a transfer or change your job.

Action Steps

1. Conduct annual market analysis before setting targets.

2. Involve branch managers and staff in target design to ensure they are realistic. My training program has reveaked that many staff who are on the ground wirh customers have a wealth of information that is beneficial to their managers and which can be utilized.

3. Integrate risk management KPIs alongside growth metrics.

4. Align targets with national financial goals.

5. Monitor quarterly performance reports to review expectations.

Final summary

• Balance Growth with Risk: Avoid chasing deposits or loans at the expense of credit quality.

• SMART Targets: Specific, Measurable, Achievable, Relevant, Time-bound.

• Customer-focused Goals: Focus on service quality, retention, and satisfaction—not just numbers.

• Tiered Targets: Differentiate between large urban branches and smaller rural ones.

• Regular Review: Adjust targets quarterly based on market conditions and economic shifts.

• Ethical Safeguards: Train staff on compliance and customer-first principles.

I wish you a stress free week

It is illegal to publish this article on any medium without the author’s permission.

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 21^st 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