Risk Management Competency Development in Banks

This Pivot proposes an integrated approach to facilitate competency development in a more comprehensive way. It examines this approach in the important but seldom studied context of risk management in banks. 

Risk management weaknesses in banks have persisted in spite of regulatory changes. This Pivot takes inspiration from three unlikely sports heroes to create the proposed integrated approach to risk management competency development, bringing together three competency development concepts hitherto studied in isolation that are more comprehensive and more effective when combined. 
The author studies the integrated approach under three specific objectives. The concepts are first operationalized into 23 actionable indicators through literature reviews and experts’ reaffirmation. Then, the t-test and discriminant analysis are used to identify how banks across different demographic groups place different emphases on these indicators. Lastly, these indicators are summarized into key themes via factor analysis.   

Eric H.Y. Koh, PhD, CFA, FCPA (Aust.), is with the Faculty of Business and Accountancy at the University of Malaya, Malaysia. He offers a unique blend of practical experience and academic credentials, having had senior management experience in the banking industry. He also facilitates several key academic and professional courses.

“It should be required reading for those in leadership at banks, bank regulators, investors in banks, banking sector equity analysts, and investment bankers globally. It has broad implications that sector participants need to heed — in particular, concerning the competency and continuity of risk management development at all levels of professional experience in a bank, regardless of where it is domiciled, even including entrepreneurial institutions.” (Janet J. Mangano, Enterprising Investor, October 11, 2019)
“An earnest attempt to broach a difficult and essential component of management. …an admirable job by liberally peppering with real world examples that cross the boundaries of staid theories thus presenting a very pragmatic approach. Sets the tone for those who wish to master the science and art of risk management.” (Professor Bala Shanmugam PhD, FCPA, SEGi University, Malaysia)

“I applaud Eric's efforts in pooling together three relevant and interconnected concepts to facilitate competency development. Written in a reader-friendly manner to guide practitioners. It also discusses pertinent theoretical foundations and references for academicians.” (Professor Kim Tan, The University of Nottingham, UK)

“A good and very meaningful endeavor to bridge the industry-academia gap. Written in an engaging manner by an ex-banker, it provides insightful perspectives based upon credible research and a rich hinterland for further study for both practitioners and academia alike.” (Choo Yee Kwan, Former Chief Risk Officer of Maybank Group,Currently Non-Executive Independent Director, HSBC Bank Malaysia Berhad, Malaysia)

“A great attempt to merge three concepts for…risk management competency development. Offers very interesting reading and enriching learning experience!” (Kasinathan Kasipillai, Former Group Chief Risk Officer, Affin Banking Group)

“… a good job of laying out the theoretical approach for risk management competency development in banks. Risk practitioners and students will benefit from the concepts and ideas presented.” (Stephen Louis Silva, Former Head, Credit Risk Management, OCBC Bank (Malaysia) Bhd, Maybank Bhd and RHB Bank Bhd)