The power of collaboration; working together to fight risks in banking (1)

“God has given each of you some special abilities; be sure to use them to help each other, passing on to others God’s many kinds of blessings”  1 Peter 4:10

Hello dear Readers, I hope you had a good week and your risk thermometers did not reach the danger zone. If it did, how did you identify it? How did you assess it? How are you mitigating it, or how are you fighting it? As always, risk is one of man’s life companions. Everywhere we are, it waits to rear its ugly head. It is like the temptation from the devil. Ignorance of it leads us to fall into its trap. Learning to cope and not allowing ourselves to be overcome by it, is the secret to a successful life, be it social, religious, career and family. That is the reason why THE RISK WATCH column covers all aspects of activities in banking.

The Power of Collaboration

This week, we are tackling the power of collaboration inter-bank as well as intra-bank which can assist in bringing losses in banking to a minimum. A Manager who lacks a combination of technical and people skills, can deteriorate the work standards in a branch or department if not well managed.  Sometimes the first question that is asked when a risk incident occurs in a department is “Who is the Manager?” “Who placed him/her there?” “Was he/she equipped to manage that place?”

 I strongly believe that if there is one thing we need most in this world, it is collaboration at every angle of man’s endeavour. 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. Just read the success stories of great men. Many of them do not attribute their greatness only to themselves as “all knowing”. Just as every author attributes their success by acknowledging various contributors, great men and women also bow to people who have come their way and contributed to their success story. Have you observed the new trend in “collabo” between various music icons in Ghana? Just listening to a song mix or combination of good old folks and young stars has made the music scene very exciting. Even when it comes to war, countries form alliances to fight their common enemy.

Collaboration among Banks in the midst of Competition

This involves refers to the practice of financial institutions working together to achieve common goals, enhance services, and address industry challenges. Here are some key examples of collaboration in the banking sector:

• Partnerships with FinTechs: the past decade has witnessed massive collaboration between banks and financial technology (FinTech) companies to leverage their technological advancements. For FinTechs, partnering with banks provides access to an established client base, trust, investment budgets, and internal expertise. Banks benefit from seamless digital customer experiences and innovative solutions. The payment system in Africa is at a high level with instant or fast movement of funds between people and businesses in Africa.
• Operational Efficiency: Collaboration enables banks to provide seamless services, improve operational efficiency, and enhance customer experiences. By working together, banks can streamline processes, reduce redundancy, and optimize resource utilization.
• Data-Driven Approach: Collaborating allows banks to pool resources and share data. This data-driven approach helps in making informed decisions, identifying trends, and improving risk management.
• Financial Inclusion: Banks collaborate with other financial service providers, mobile network operators, and policymakers to promote financial inclusion. These partnerships help build robust financial systems and guard against illicit activities.

Selecting the right persons is key in risk management

According to author Jim Collins in Good to Great, “People are not your most important asset, the RIGHT people are.” Indeed, in addition to having the RIGHT persons, management should also place them in the RIGHT positions. It is about time Human Resource Managers study the core human requirements or characteristics for EACH position in a financial institution, and this can only be done well if they appreciate the core business and expectations. I sometimes find some human resource managers being bullied into submission to select or place certain persons in the wrong positions, putting those individuals at great risk to themselves and also to the institution. In this era where HR management is a science, proper assessments involve the motivational needs, the behavioural trends as well as the technical skills that combine to make a person best fit for a role.

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 that 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 rather 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. Collaboration is essential for effective risk management, as it allows diverse perspectives, skills and experiences to be integrated and leveraged in identifying, analyzing and responding to potential threats and opportunities.

Collaboration in branch banking functional roles

Let me take the example of a universal bank branch. We shall look at a bird’s eye view of what roles people play. For the typical branch banking experience in Ghana, (which includes both the old time as well as the modern trends), let me create a list of behavioural attributes which can be combined to fight risks and enhance profits for the bank. These do not exclude the technical knowledge which is usually proven with the requisite academic qualifications before entry.

 Front desk functions:

These involve account opening, customer enquiries, customer complaints, account management and cross-selling of products: This role requires the following human attributes among others:

• Pleasantness
• Honesty
• Patience
• Tolerance
• Effective listening skills
• Empathy
• Responsiveness
• Good inter-personal relations

Teller Functions

These persons necessarily have someone standing in front of them most of the time, whether they like it or not.

• Pleasantness and love for the job
• Honesty
• Ability to work under pressure
• Patience
• Tolerance
• Empathy
• A good combination of speed and accuracy
• Good inter-personal relations
• Observant
• Good numeracy skills

 Back Office functions

These persons do not usually have customers facing them, even though they also have benchmarks to work within. There is much more data entry, reconciliation of figures and analytical thinking.

• Meticulousness and care
• Speed and accuracy of data entry
• Analytical skills
• Good numeracy skills
• Honesty

 Credit Function

This is a very sensitive area where people can be easily compromised to recommend bad loans even from day one.  Credit is the backbone of banking. Decisions made can make or break a bank. It therefore requires:

• Honesty
• Discernment
• Uncompromising in customer’s loan appraisal.
• Analytical
• Observant
• Good numeracy skills

Sales and Marketing Functions

This is another front desk role that includes meeting customers outside the bank. It therefore requires in addition:

• Honesty
• Pleasantness
• High moral standards
• Good inter-personal relations
• Observant

In a nutshell, these are the basic human qualities expected of the various groups of functionaries in a typical branch in Ghana. How do we get all these people with diverse educational and cultural backgrounds to collaborate? This is a difficult exercise.

The Operations and Branch Managers

These persons are in charge of various activities undertaken in a branch. Apart from their technical expertise they need to exhibit the following characteristics:

• Supervisory and leadership skills
• Mentoring and Coaching skills
• Listening skills
• Delegation and monitoring skills
• Empathy
• Be a Role model
• Succession Planning
• Conflict management skills

 Collaboration and conflict management in risk

In a group composed of individuals with diverse working styles and cultural backgrounds, it is very important to learn dealing with conflict. Conflicts are only natural in teams pregnant with new ideas. The “Yes People” do not make an organization grow. Learning to treat differences of opinion professionally is quite difficult to achieve, but it eventually comes with conscious effort and self-discipline.

I will stop here for now. Next week, I shall examine some ways of getting all these functionaries to collaborate in the branch environment. This has been scientifically tried and tested in many banks outside Ghana where The HR Directors have very influential roles on the board and are therefore able to succeed in talent management to ensure most employees are placed in best fit positions to minimize risk. No more square pegs in round holes.

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 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 albique@yahoo.com

Tel: +233-0244333051/+233-0244611343