Finance Experts  Advocate Increased Risk Mgt In Banks

Finance experts in the banking sector have advocated an increase in the risk management system in the financial sector to ensure long term growth in the Nigeria banking sector.

Speaking at the Proshare analysts report on the reassessment of tier 1 banks, chief economist and managing editor, Proshare, Teslim Shitta Bey, disclosed that banking is becoming evolutionary with an improved version of technology in financial intermediation that will lead to financial adaptation.

He said: “There’s going to be greater alignment between the businesses and what is going to bring banking service provider closer to its customers while understanding the needs of those customers with demands stretched and risk factor coming into place.”

While the report notes that the future of banking is technocentric with the increased use of artificial intelligence and machine learning becoming the cornerstone of competitive advantage, saying, to prevent future crises in the Nigerian Financial sector, policymakers must re-evaluate the banking framework and balance the need for economic growth.

On the call for banks to implement robust asset liability management practices to fortify against unexpected shocks, the report says, banks must identify key customer pain points and resolve their service delivery challenge with minimal disruption to their daily routines while pointing out that dynamism would be a key feature for surviving business disruption beyond 2023.

Chief financial officer, Ecobank, Oyedeji Ibukun  emphasised on risk management, capital risk in the financial sector and the role of the Basel III regulation on liquidity in the banking sector.

“The evolution of banks has to do with its profitability, while the fintechs are playing a major role in the banking space, there is a need for replicating the model of the fintechs so banks investing in technology will has helped reduce cost of operation while competing in the non-interest revenue space,” she stated.

Managing director, Optimus by Afrivest, Ayodeji Ebo, stated that, there are evolving trend around the banking sector with the risk management has to be strong and a need to have a close monitoring of the banks to avert the 2007 financial crisis in the financial sector.

“To quantify and assess their risk requires a certain level of capital to venture into those risks even with the structure of banking which is changing, to capture the impact of banking need to look at the financial services on the stock exchange which is becoming difficult for their assessment” he averred.

However, he alluded that, the risk management has continued to improve and getting stronger with the adoption of the Basel III and has significantly help in repositioning banks, as there is progress in the banking space with banks diversifying, there is need for stronger risk management system to ensure there would be no major shock bringing any bank down.