Many governments worldwide take seriously bank management practices. This is because banks are central to many functioning
economy. Nowadays, many banks have gone beyond their traditional comfort zones of simply "banking" and have assumed many other
roles that have traditionally not belonged to them (fsround.org [online]). Some of
the activities that many bank management have been undertaking recently other than the traditional deposit taking and giving
out loans include, underwriting and dealing with securities, managing and selling shares in mutual funds, and the provision
of insurance products known in banking parlance as "bankassurance." Sometimes
bank management has had to grapple with some competition by non-banking firms that provide their products often from an advantageous
position in terms of supervision. One should however, note that assuming other non-traditional roles by the banks does not
necessarily mean new risks that the bank management has to deal with. The challenge for the bank management strategies is
to manage and minimize the new risks. It should be conceded at this point that the role of a bank in different countries may
differ (Morison, 1980), and this piece does not purport to be one-size-fits-all as far as bank management is concerned. The
new roles that many banks have assumed in the wake of deregulation have meant that the risks management becomes important
part of a bank management strategy.
Bank management nowadays operates under an increasing pressure to make their branch network more effective (Zopounidis,
2002). The efficiency is measured against several things including the level of financial intermediation, the quality of financial
services, management of costs and the ability to attract and retain customers. These four attributes provides the benchmark
against which the efficacy of the bank management system can be measured. The primary objective of measuring efficacy at the
branch level is to gain insights into their operations so that the banks management may come up with the means to improve
the branch performance, and this will inevitably have effect on the overall banks performance.
Another closely related factor to banks management’s concerns is the continued improvements in technology. This
has increased the volume and the speed with which information can be exchanged, but it by no means completely does away with
the ever-present risks that bank management constantly worry about. For instance, that technology may facilitate commission
of fraud, or a costly mistake which can take a while before the bank management can detect the problem and deals with it.
Admittedly, mistakes and fraud are nothing new, the improved delivery systems increases the risks that the banks management
have to deal with, and the complexity of some of the new techniques means that only the specialists, who are expensive to
hire and hard to find, who can detect them, hopefully at an early stage. Further, the competition for the new technologies
may delay the implementation of new technology solutions to improve risk management.
Finally, the government in its supervisory role should provide well defined criteria for sound bank management practices
to ensure optimal efficiency. The major areas that are good candidates to be covered in such discourse include accounting
and auditing, the structure and functions of market based banking bank risk management and organization, bank funding, banks
and privatization, role of the central bank, bank management best practices, banking regulation and supervision and banks
and enterprises.
REFERENCES
1. Zopounidis, C (2002) New Treads in banking Management. Springer Publishing Company, New York.
2. Fair, DE, de Juvigny, FL
(1982) Bank Management in a Changing Domestic and International Environment. Springer Publishing Company, New York.
3. Morison, I (1982) The Role of Banking in a Financial System in Fair, DE, de Juvigny, FL (1982) Bank Management in
a Changing Domestic and International Environment. Springer Publishing Company,
New York. Chapter VI
4.URLhttp://64.233.169.104/search?q=cache:34t-iDwj0j8J:www.fsround.org/media/pdfs/riskmgmt.pdf ). Last accessed 18
October 2007.
