Banking Processing Risks and Control

Banking processing functions have assumed greater significance with revolution in the banking industry. The change is not only sweeping but demands innovative standard operating procedures (SOP) for banking processing. Yet risk continues to dominate the new face of banking processing in response to the revolution. Usually banks fall back on SOP for operational risk control. The use of SOP is effective, no doubt about it. That explains why SOP manual furnishes institutionalised guidelines for banking processing. However occasional manipulation of SOP by customers and bank staff alike persists despite internal controls. This fact has two main implications for operational risk management. Neither SOP nor internal control can forestall the observed manipulation all by itself. The reason is simple. Internal control and SOP do not encompass all aspects of risk management techniques in contemporary banking processing. Thus, there is need to strengthen SOP and internal control with other proven operational risk management techniques. That way it becomes more practicable to assure the effectiveness of banking processing. It is with such helpful risk management techniques that this book is concerned. In writing the book, the author adopted a practical methodological framework and analysis. The methodology features the 'what', 'how', and 'why' approaches to investigating causes and effects of a problem. Doing so, the author: -Identified and described particular critical banking processing functions -Explained the usual and practical procedure for carrying out the functions -Stated the reasons for doing the work in a particular SOP-supported ways -Pinpointed controls put in place by bank management to check possible abuses and infringement of the SOP manual -Identified risks inherent in each processing function and measures devised to mitigate the risks -Mentioned and suggested management requirements for mitigating contemporary and evolving banking processing and operational risks. The book is divided into seventeen chapters and covers critical banking processing functions and related operational risks and controls based on foregoing framework. As a practical text, the book fulfils the needs of bankers, analysts, academics and students for a book that sheds light on the workings and outcomes of operational risk management in contemporary banking processing. It is concise, authoritative and informative. With these attributes the book stands out as a good read.