BY JONAH NWOKPOKU
Managing Director, Standard Chartered Bank Nigeria Limited, Bola Adesola has predicted that another crisis looms in the global financial sector.

She made the prediction while delivering a keynote address at the unveiling of the e-learning version of Fundamentals of Credit Training Programme by IBFCAgusto Training Limited in Lagos last week.

Speaking on the topic, ‘The Next Credit Bust – Preparing Your Workforce Through e-Enabled Credit Training,’ Adesola said that the even though the global economy has weathered the worst financial crisis between 2008 and 2009, it is not yet time for renewed optimism, since according to her, “the next financial crisis is already programmed.”

“The panic appears to be over but now is the time to get worried. It’s somewhat like an earthquake. We cannot predict exactly when it will happen, but we know that it will. Yet unlike earthquakes, financial crises are man-made. They need not happen. They happen because we allow them to happen.

We could take many measures to reduce their frequency and depths, but we often fail to do so. The greatest tragedy would be to accept the refrain that no one could have seen the last crisis coming, and nothing could have been done. If we accept this notion, it will happen again,” she said.

She therefore identified proper risk management and effective training in preparing better against such crisis. According to her, “the key factors that determine which organisations are better prepared are its People, Processes and Systems. Banks failures during the credit crunch era happened because elements of processes, procedures and systems were clearly compromised.

Banks such as Lehman Brothers, Bear Sterns, Northern Rock in the US and UK, and back home, Intercontinental, Oceanic and Bank PHB, did not survive the credit bust. Whilst organisations like Standard Chartered Bank, GTB and First bank proved that investing in people and training have a positive impact on franchise sustainability especially during tough times.

“In addition, sound and robust risk management policies, and adherence to same, are crucial to the survival of any financial institution. Many of the risks faced by an organisation may be in the nature of uncertainties or emerging risks which may be difficult to quantify or control. Nonetheless, it is important that these risks are identified in order to establish mitigating actions to the risks crystallizing.

“The inability to identify business risks is as a result of acute dearth of knowledgeable and skilled risk professionals. Most of the available risks experts appear to be concentrated in certain banks, yet even in these institutions, those with risk experience may not be fully involved in major strategic decision making.”

She therefore identified knowledge and skills development as vital to the health of any organisations, saying, “we live an information age today, and organisations are routinely valued not just on their physical but on their intellectual capital.

Training is one of the chief methods of maintaining and improving intellectual capital, so indeed the quality of an organisation’s training affects its value. Untrained or poorly trained employees cost significantly more to support than well-trained employees do. Training positively affects employee retention and is a valuable commodity that, if viewed as an investment rather than as an expense, can produce high returns.”