The application of holistic risk management in the banking industry
- Authors: Chibayambuya, John
- Date: 2008-05-12T13:21:21Z
- Subjects: Bank management , Risk management
- Type: Thesis
- Identifier: uj:7049 , http://hdl.handle.net/10210/357
- Description: The banking industry in South Africa is facing three main challenges, namely: continuous change, foreign competition, and increasing levels of risk. These problems flow mainly from cultural diversity, globalisation, and rapid technological development in systems and communication. Decreasing predictability stems to a great extent from a lack of foreknowledge of how globalisation will develop, and how it can influence the South African banking industry in general and holistic risk management (HRM) in particular. Management of the South African banking industry therefore need to rely on crucial intelligence and foreknowledge concerning events, trends and development of (HRM) that affect the profitability and future strategic viability of the whole South African banking industry. At the onset various concepts and processes were emphasised in this study, namely operational risk management, strategic risk management, the risk management culture in the banking industry, the role of risk management in the banking industry, the role of risk management process in the banking industry, corporate governance in the banking industry in South Africa. However, the main purpose of this study was to explore the need and the dynamics of managing risk in the banking industry in a holistic manner. To this end the development of, and trends in (HRM) as part of good corporate governance in the banking industry were researched and documented. The practical aspect of the study was firstly based on the definition and analysis of different categories of risk in the banking industry. The definition and analysis was done in order to cover a broader range of risks the banking industry is facing. Secondly the risk management culture in the banking industry was investigated. Thirdly the role of risk management in the banking industry was explored in detail. Fourthly the risk management process in the banking industry was investigated and explained. Fifthly the link between risk management and corporate governance was explored. Sixthly models developed by Kloman (2000), Lam (2003) and Regester and Larkin (2005) were used as a benchmark to develop a framework for the management of holistic risk in the banking industry. It was concluded that in view of the need in the South African banking industry for a structured means of managing risk holistically, and in view of HRM constituting such a process, there is relevance for the implementation of HRM in the four big banks of the South African banking industry. However, small and unlisted banks do not manage HRM as suggested by the HRM framework. In this regard a number of recommendations were made with respect to managing HRM proactively. A framework based on empirical research and earlier work by Kloman (2000), Lam (2003) and Regester and Larkin (2005) was furthermore suggested for the implementation of HRM in the South African banking industry in the belief that this framework, and the overall research reported in this study could be of theoretical as well as practical value for risk managers in the South African banking industry. , Dr. D. J. Theron (UJ) Dr. T. P. v/d Walt (ABSA)
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Challenges and benefits of agile project management in a South African bank : a case study
- Authors: Sibotho, Mzwandile
- Date: 2018
- Subjects: Project management , Bank management , Agile software development
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/285880 , uj:30925
- Description: M.Ing. (Engineering Management) , Abstract: The main focus of this research study is based on the field of agile project engineering management; this includes the challenges and benefits of agile project engineering management at the First National Bank. Agile tool is becoming popular for small to medium projects; it is continuously and gradually being adopted as internal business units strive to please the customer needs and wants. Most business units within the bank decided to adopt the agile methodology instead of previously used traditional waterfall methodology, which would enforce the business units to wait for the eighteen month project delivery cycle which may often result in delivering of the wrong product to the market. The idea of agile delivering in short cycles which is two weeks and quarterly project release is appealing. Business units want to get better at producing products and services to targeted customers faster. Agile uses an approach that is value driven which enables the project management administrators and managers to produce high quality work, high priority and this results in the project managers look more effective and efficient to stakeholders.
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Risk management in banking : a theoretical overview
- Authors: Smit, Ellen Yolande
- Date: 2011-12-06
- Subjects: Risk management , Bank management
- Type: Thesis
- Identifier: uj:1836 , http://hdl.handle.net/10210/4196
- Description: M.Comm.
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Internet banking : an analysis of the adequacy of the controls and solutions for deficiencies
- Authors: Smith, Rozanne Janet
- Date: 2012-09-14
- Subjects: Internet banking , Electronic funds transfers , Cellphone banking , Bank management , Financial services industry - Management , Banks and banking - Computer networks
- Type: Mini-Dissertation
- Identifier: uj:10373 , http://hdl.handle.net/10210/7739
- Description: M.Comm. , Electronic commerce is a large and constantly growing industry (Kisimov. 2008), and on-line transactions are returning ever-larger revenues to electronic merchants. However, the a-commerce industry is still facing a range of problems concerning the process of secure completion of on-line transactions. "Such problems are connected to consumer fears dealing with the identity of on-line merchants, their security pre-cautions and methods for accepting on-line payments" (Kisimov, 2008). According to Kim (2007), financial institutions must ensure that the perceptions and realities surrounding security are successfully managed, both to ensure adoption and to protect customers and the institution from emerging threats. The South African Banking Risk Information Centre (SABRIC) expressed its concern about the increase in phishing attacks on South African banking clients. Banking industry data managed by SABRIC shows that the number of phishing websites targeting local bank clients that have been detected and closed down by the banks have more than trebled since November 2009 until February 2010. This is a clear indication that fraudsters are constantly trying to defraud internet and cell phone banking clients (SABRIC, 2010:1 ). This study will aim to determine what controls financial institutions should implement to ensure that internet and cell phone banking can be done safely and with confidence. It will also determine whether the independent external auditors play a vital role in the process of implementing controls and solutions. With internet and cell phone banking growing rapidly (more than three billion people depend on cell phones every day for business and personal use), it is of the utmost importance that the necessary controls are implemented to protect clients' confidential information (Ciickatell, 2009a).
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The determination of the important risks in the management of a bank
- Authors: Du Preez, Markus
- Date: 2011-11-30
- Subjects: Bank management , Risk management
- Type: Thesis
- Identifier: uj:1762 , http://hdl.handle.net/10210/4116
- Description: M.Comm. , The aim of this study was to take a closer look at the modem financial institutions of the world and to determine what adverse conditions these companies face. Banks are some of the strongest organisations in a country, and the banking sector is a major employer. Yet, the risks faced by banks are enormous, and without the prudent and responsible management of these risks banks can find themselves in severe trouble. Recent situations in the South African banking sector underpin this, as several of the small banks in the country went into judicial management or were put out of business because they failed to meet their liquidity requirements. Risk management in banking is one of the most important tasks in the institution. Regardless of the division or type of operation, banks face certain risks. In this study, the researcher looked at the risks described in the literature as the main risks found in the banking environment. Solvency, liquidity, credit, price and operating risks are the risks most commonly discussed in the literature on banking risks. Although the five main risks constitute a serious threat to a bank each in its own right, each risk can be subdivided based on the likelihood of the risk materialising. The researcher therefore subdivided each major risk into subrisks. The question was then posed: Are there any similarities between these risks? The researcher developed a model whereby risks are categorised according to the attributes they have in common. The study classified the risks into the categories of market, credit and other risks. The objective in classifYing known banking risks is to assist the risk management team in a bank to manage similar risks in a similar way. Instead of focussing on each major risk and its multitude of subcategories individually, it is easier to manag~ a set of risks according to their similarities. Furthermore, the researcher wanted to determine which all the banking risks discussed would be universal in the danger they hold to any banking operation or any division operating within a bank. The question was posed: What are the classical risks in banking that would without a doubt lead to bank failure ifleft unmanaged? Liquidity, solvency and credit risks were the risks identified as critical in any banking operation and the risks that history has shown to be most detrimental to the future viability of any bank. Finally, the study looked at the management of these three classical risks from the perspective of determining policy and strategy. The study drew form literature, personal observation and the input of risk and bank management professionals to highlight some ofthe most important elements in credit, solvency and liquidity management.
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An ALCO perspective on treasury risks
- Authors: Schoeman, Gideon Petrus
- Date: 2012-09-05
- Subjects: Asset-liability management , Bank management , Risk management
- Type: Mini-Dissertation
- Identifier: uj:3592 , http://hdl.handle.net/10210/6973
- Description: M.Comm. , The purpose of this study is to describe the different approaches to risk management by the bank's ALCO and the bank's treasury. The clear identification of their responsibilities will improve overall management, profitability, performance evaluation and benchmarking, as well as the interpretation and management of market risk regulation. The contribution of this study lies in the fact that this problem is frequently mentioned by senior bank executives and researchers as one factor inhibiting to the effective strategic management of banks and one of the major causes of friction between management in banks.
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Die befondsingsbeleid en -strategie in bankwese met spesifieke verwysing na risiko
- Authors: Bothma, Stefanus Jacobus
- Date: 2014-04-10
- Subjects: Asset-liability management , Bank management , Baks and banking - Equipment and supplies
- Type: Thesis
- Identifier: uj:10554 , http://hdl.handle.net/10210/10080
- Description: M.Com. (Business Economics) , By paying more attention to the risks associated with funding, banks will be able to fund themselves more effectively. Of especial importance are liquidity and interest rate risk because of the perceived trade-off that exists between them. This complicates the funding of a bank. To manage the liquidity and interest rate risks effectively requires a comprehensive analysis to ensure that they are properly understood. The causes, origins, inter-relationships with other risks and the measurement of risk are investigated thoroughly. The management of these risks is then examined. With regard to risk management, it is especially important not to focus on anyone risk in isolation, but to manage the multiple risk profile bearing in mind their interrelationships. All the risks a bank is exposed to are ultimately reflected in capital risk. Stringent capital requirements are imposed upon banks and these are being phased in over the period to 1995. Consequently capital risk is also investigated. The relationship that exists between liquidity risk and interest rate risk is investigated. Ways and means to separate these two risks are examined to try and manage them separately. In this way each of these two risks can be managed within acceptable norms. To achieve this goal, the use of the traditional funding instruments, modified funding instruments and derivatives are examined. Each of these are investigated and applied to the funding of a bank. The yield curve is investigated as one of the ways to explain the term structure of interest rates. The different types of yield curves and the meaning of each are dealt with. Thereafter the use of yield curve analyses in forecasting interest rates is assessed with a view to formulating an optimal funding strategy. An asset and liability model was used during the analysis of liquidity risk, interest rate risk and the yield curve.
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The reliability of banks’ initial assessment of individuals’ credit applications
- Authors: De Gama, Jason Samuel
- Date: 2013-12-09
- Subjects: Credit analysis , Bank management , Banks and banking
- Type: Thesis
- Identifier: uj:7825 , http://hdl.handle.net/10210/8719
- Description: M.Comm. (Financial Management) , If the creditworthiness of applicants for overdraft facilities is assessed inaccurately, future defaults on repayment commitments may threaten the cash flow and profitability of the bank issuing the credit. The main purpose of this study is to assess how reliable the inputs used by one large South African bank to determine the creditworthiness of individual clients applying for overdraft facilities on personal current accounts are in predicting the future behaviour of the client. The findings of this study should inform the bank in question (and other credit providers) of the extent to which the original application-based score (OABS), is an accurate predictor of a client's future behaviour after the account is opened. It will also help them to identify which of those variables are the best predictors, and so reduce the risk of default. A quantitative research methodology is employed, using secondary data on individual applications processed at one large South African banking institution between July 2006 and July 2009. The data was used to establish whether any (and which) of the input variables captured by the bank when the client originally applies for credit, are strongly associated with the behavioural risk indicator (BRI) assigned to them after the first six months (BRI 1) and twelve months (BRI 2) after being granted a loan, respectively. The findings of this study revealed that non-financial characteristics (biographical and demographic information) are not considered in the OABS; while finance-related characteristics (segment, income bands, overdraft taken up category and overdraft taken up as a percentage of gross income categories) are. The study found that there is also an association between the OABS and the behavioural scores (BRI 1 and BRI 2) allocated thereafter. In particular, the number of days the client went into excess during the initial six and subsequent six months is strongly associated with the BRI 1 and BRI 2 scores. This finding implies that, despite the utilisation of non-financial measures to determine creditworthiness scores, a client’s current behaviour is still the best predictor of future behaviour. The study concluded that, despite its low predictive power, the OABS is, however, associated with, and to a certain extent predicts, the future behaviour of clients.
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The role of business process reengineering at the trust area of ABC Trust Limited
- Authors: Edward, Leona Nicole
- Date: 2014-03-17
- Subjects: Reengineering (Management) , Bank management
- Type: Thesis
- Identifier: uj:4344 , http://hdl.handle.net/10210/9693
- Description: M.Tech. (Operations Management) , In the banking sector, the delivery of impeccable service is one of the main and focal drivers to maintain and increase the customer-based. Therefore, the banks cannot afford to overlook examining their internal structures and processes. Incremental upgrade of a management information system or alignment of processes may prove in the long-term to have a minimal impact upon customer value. Organisations may need to employ business process reengineering (BPR) for the radical redesign of processes to improve performance dramatically in terms of cost, quality, service, flexibility and speed. Process reengineering is about reinvention, rather than incremental improvement. The purpose of this research is the study the role of BPR within the banking environment. To determine the gaps that restricts performance and the address these through process reengineering. The key elements would be to adopt a continuous improvement process, a team-learning culture and the need for strong leadership influence to support the changes. This would place the area of focus on a competitive platform within the industry. Based on the key success factors of process management in terms of process challenges, regulatory compliance was dominate (29.4%), while customer experience was the lowest (3.8%). Participants lacked knowledge of the technical and behavioural aspects of business process reengineering. The leadership style that management has adopted, contradict the staff’s view. Likewise, with communication management has rated their communication with staff much higher compared to how staff receives the message from management. The positive finding is the good level of team effectiveness within the bank. 88.5% of participants agreed to a need to change and/or improve. This reflects that a greater part of the workforce wants to achieve more. Services of a reputable consultant may be employed to educate and guide the bank through the change effort to foster solution-based thinking and client-centric approach. The implementation of a change management process and a communication process is recommended. Through a continuous improvement approach, cross-functional and high performing teams are created that leverage off talents and skills from experience staff. The efforts of BPR would place the bank on a more competitive platform with a sustainable competitive edge.
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Profile dynamics of the South African banking sector
- Authors: Khumalo, Mandla Vincent
- Date: 2019
- Subjects: Banks and banking - South Africa , Bank management
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/414897 , uj:35011
- Description: Abstract: A firm’s level of debt versus its level of equity has important implications for its value as well as its cost of capital. However, there are opposing views among many researchers and corporate finance experts pertaining to a firm’s optimal capital structure. Banks are responsible for providing liquidity as demanded by depositors, and to extend credit as well as liquidity to their borrowers through lines of credit. Given this central role that banks play in an economy, banks have always been concerned with both solvency and liquidity. This study explored the capital structure of the big four banks in South Africa by undertaking a descriptive analysis of the debt and equity dynamics of the big four banks during the period 2007 to 2016. The study employed secondary data which was obtained from various sources such as Bloomberg, online databases, Banks Act-returns, financial statements and reports of the big four banks in South Africa. The data collected was only restricted to Absa Bank, FirstRand Bank, Nedbank and Standard Bank. The study found that FirstRand has the best funding structure among the big four South African banks. ABSA has the second-best funding components with the highest ratio of retail funding to total funding. The study further analysed that Nedbank is by far the most reliant on institutional funding, leaving it particularly vulnerable to re-pricing in this market. Standard Bank has the lowest ratios of long-term and retail funding to total funding and is most reliant on foreign funding. , M.Com. (Finance)
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