22 October 2016


Retired Member

1,975Posts 6,428,545Views 2,302Comments
Financial Risk Management

Financial Risk Management

This network brings together professionals involved in the oversight and management of their company's financial risks and exposures as well as solution vendors, in order to discuss risk issues including interest rate risk, foreign exchange risk and commodity price risk, among others.

The Top 5 Concerns of Sub-Saharan Banks

22 February 2012  |  3359 views  |  0

Middle class population in Africa has tripled since 1972 and has now reached 34% of the content’s population (data by “The Middle of the Pyramid: Dynamics of the Middle Class in Africa” report by African Development Bank). In response to this trend, financial services companies are expanding and increasing in complexity. Growth means changes. Changes bring risks.

High dependence on technology, fraud, competition from new entrants, credit risk and risk management quality are the top five risks perceived as most severe by Eastern African banks according to PricewaterhouseCoopers research “Spotlight on financial services 2011 Risk Survey”.

Technology dependence risk is topping this list: the concern is caused by possible shortage on technological capabilities as well as on skilled human resources. Analysis of risks faced by banks allows us to focus on trends in Sub-Saharan African financial industry for 2012. Competition results in reduced margins for banks and the need to improve customer service. Banks will tend to relax their credit approval and appraisal procedures, thereby increasing risk.

We have learned to address the causes, rather than the symptoms, of any problem. Following steps will help banks mitigate risks outlined above:

  1. Embed risk culture throughout the organization. This implies defining set of rules according to your risk appetite, establishing a consistent business process and applying certain tools.
  2. Balance risk exposure using in-house credit scorecards.
  3. Reach out to unbanked and under-banked customers offering mobile and online banking services.
  4. Generate customer loyalty based on their behavior insight.
  5. Select software that will easily integrate with core system and other solutions and that will support moving to the cloud.
  6. Eliminate vendor dependence: train on-site staff to adjust and maintain software solution in response to your strategy.

The problems discussed in this post are certainly just a part of global landscape. For instance: according to recent survey by National Association of Credit Management, dominating concern of the US credit professionals for year 2012 is "Lingering uncertainties about the still sluggish economic recovery" (28.23%).

What are your top concerns for 2012 and how have you prepared to face them?

TagsSecurityRisk & regulation

Comments: (0)

Comment on this story (membership required)

Latest posts from Retired

Fintech innovation in the B2B space has only just begun

12 September 2016  |  10394 views  |  1 comments | recomends Recommends 0 TagsPaymentsInnovation

Protecting Data with DLP

23 August 2016  |  5020 views  |  0 comments | recomends Recommends 0 TagsSecurityBrexit

How to end what ails online commerce

22 August 2016  |  4576 views  |  2 comments | recomends Recommends 0 TagsPaymentsTransaction banking

What internet retailers need to know about Google’s recent webspam report

08 August 2016  |  8274 views  |  0 comments | recomends Recommends 0 TagsPayments

Modelling fixed income: Why realtime analytics are key

29 July 2016  |  5255 views  |  0 comments | recomends Recommends 0 TagsPost-trade & ops

Retired's profile

job title
member since 2014
Summary profile See full profile »

Retired's expertise

What Retired reads
Retired writes about

Who's commenting on Retired's posts

Hardeep Singh
Ketharaman Swaminathan
Graham Seel
Gerard Hergenroeder
Konstantin Rabin
Matt Schofield
Anna Robert
Ian Davis
Steve Patel
Aparty Behera
Karim Maalouf