One Massive Lost Opportunity

This week has been hugely defining for me and everything I stand for in my professional life.

For the last seven years readers may have noticed that I have been constantly harping on about the need to seize the opportunity afforded by the global financial crisis to reform the culture of banking.

Three independent people have decided to sit me down and politely ask me to step fighting yesterday’s battle.

As one close associate of mine put it “Sandro the crisis happened almost a decade ago. People are bored hearing about it. The world moves on”.

As if that wasn’t enough to cause me to re-evaluate, Lehman Brothers’ administrator announced that the records of that tragic organisation may be destroyed in the not too distant future obliterating a valuable archive of how to blow up an esteemed institution.

I was about to give up my campaign when news broke that a number of regulators had named, shamed and fined six banks for manipulating foreign exchange rates.

Named, shamed and fined banks for activities that did not occur a decade ago. Let’s be clear. These activities occurred after the retribution of the global financial crisis commenced. The manipulation of FX rates continued until 2012.

Reinvigorated to continue my campaign with a new sense of energy I feel the need to re-state what gets me out of bed to pursue my professional mission.

Culture in Banking

I do believe that culture in banking needs to be transformed.

I do not however believe that bankers need to just accept that everything they do is evil and that regulators are always right. Regulators themselves are going through the “anger phase” of their traumatic response to the global financial crisis.

I am advocating a more balanced approach to reforming culture that calls for all of the elements of human behaviour to be taken into account and managed. My view is that the need to sell and trade should be balanced with the need to embed appropriate risk management practices.

The internal audit profession is currently trying to work out how to audit culture. I believe that the banks need to develop a cultural risk management framework that balances these dilemmas. Readers may be interested in reviewing my contribution to this subject.

It is clear that whatever top management do some people will never get it. Their cultural outlook is so contaminated that they are beyond transformation. In these situations appraisal and recruitment processes need to be transformed to identify the rotten apples and replace them with new seeds that will allow bankers to service all of their stakeholders.

Conscious Capitalism

The second focus of my work revolves helping organisations identify their stakeholders and ensure they serve as much of their needs as possible.

Some commentators refer to this approach as conscious capitalism. This doctrine recognises that business doesn’t only pander to the requirements of greedy employees and shareholders but also exists to meet the needs of other stakeholders that include customers, regulators and society in a broader context.

Risk Audit’s training offering embeds the stakeholder dimension.

Education

As I move into the legacy phase of my career in the City of London, our classroom and webinar offering aims to educate internal auditors, risk managers and bankers in general on the challenges they face in this fast evolving world. I hope to use my years in banking along with the federation of trainers that we work with to deliver knowledge expressed from today’s perspective.

Without technical know-how we will not be able to challenge individuals who may be about to cause further damage to our industry’s reputation.

Thank you for giving me this therapeutic opportunity to share my frustrations and I look forward to collaborating with my readers and clients in helping banks reform themselves as we work towards a brighter stakeholder focused future.