Improving Risk Management in Financial Services

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The global banking and the broader financial services industry leaves the last decade on a much more solid footing than it left the previous decade. Then, the financial crisis had wreaked its chaos but now, as Deloitte notes, “The global banking system is not only bigger and more profitable but also more resilient than at any time in the last 10 years.”

Acknowledging some regional differences, with European banking faring worse than most other regions; a calming in the regulatory landscape, coupled with (to name just one other positive force) more of a partnership model with fintech and bigtech companies, has enabled the sector to strengthen and enter 2020 with a much more optimistic outlook.

Yet, the foundational requirements to raise service levels, improve risk management and meet regulatory requirements remain, and provide an on-going and significant challenge to financial services providers.

This post examines the role of safety performance in improving risk management, specifically with respect to the maintenance of infrastructure (buildings and data centres), i.e. the control of work and of those performing the work. It discusses the benefits already seen by many in the financial services sector of replacing traditional paper-based processes, such as permit-to-work, with more robust electronic, web-based and mobile alternatives, such as e-permits.

While there are doubtless many other, higher profile threats to the foundational requirements, such as legacy systems and cyber-crime, these are also much tougher nuts to crack. By comparison, the maintenance of infrastructure and ensuring the right people, with the right skills, work to the right method statement, in the right place, at the right time, is a much lower hanging fruit yet has the potential for significant damage to brand reputation as well as providing operational risk if not carried out effectively.

The Impact of Safety on Reputational Risk

The maintenance of infrastructure (buildings and data centres) introduces both reputational and operational risk. However, it can also impact service levels particularly in data centres where the drive for 100% availability and a zero-risk approach to safety can become a point of conflict.

While there are operational risks from poor safety performance, the major risk within financial services is likely to be reputational. Lapses in standards, compliance failures or, for example, exposing employees and customers to asbestos in older branches can all have an extremely negative impact on brand reputation, not to mention the impact on the individuals involved.

The reputational damage will be particularly severe where the solution that would have prevented the situation arising is shown to be one that is simple, proven, easy to implement and cost neutral. This is the case with paper permit-to-work.

Implementing any complex process using paper is, of course, going to expose the limitations arising from a manual process. With permits to work, a lack of speed and transparency are just two limitations that result in a lack of information at the point of decision making. Is the worker qualified to do the work? Do they have the correct, up-to-date training? Are they insured? Have we adequately performed our clash checks?

Admittedly, the financial services sector is ahead of many, if not all, other sectors in terms of eradicating these paper-based processes and replacing them with electronic systems. However, we still see inconsistent roll-out of electronic systems across geographies (even within the same organisation) as well as many companies who are still risking their brand reputation by persisting with paper in a digital world.

Safety Digitally Using e-permits

e-permits is a web-based, mobile-enabled work authorisation and permit to work system. It was designed to emulate the positive ‘design’ aspects of existing PTW processes while eliminating the operational issues of paper. Indeed the initial impetus behind the development of e-permits was a project that was too big to handle using paper – Canary Wharf in London.

e-permits reduces the disconnect between policy, procedure and what’s happening on the ground by:

  • reflecting policies and rules in day-to-day activity,
  • managing Risk Assessments and Method Statements,
  • checking for adequate insurance,
  • checking the team’s competences and training,
  • emulating agreed decision-making scenarios,
  • highlighting clashes and providing complete transparency across large and disparate portfolios.

Benefits of Deploying e-permits in Financial Services

The major benefit that e-permits delivers to financial services organisations is improved risk management through the safe control of work(ers) and compliance with Government legislation, industry regulation as well as with the company’s own Health and Safety, Corporate Social Responsibility and other Corporate Governance policies.

“We have really engaged with e-permits. It didn’t take long for us to recognise that the system offers reduced risk, contractor control, compliance to health and safety and most importantly keeps us completely satisfied with regards to security in our critical environment data centres. Internally, when we carry out audits we can see exactly what work has been carried out and when and where and by who. This gives us much-needed composure.”Colin Bryant, Data Centre Facilities Operations Manager, Santander plc.

“We recognise the benefit of e-permits to streamline and create an effective process around governance in our premises. As a financial institution, e-permits is of particular interest to us as the solution can be rolled out to non-property staff. For those who control the information dashboard, this of course speeds up the process over having two systems in place, it combines the permit to work and the security passes. Banyards provides a reassuring level of consistency with their people, and their advice. They have always been approachable and willing to solve any issues. As a result we are considering rolling out e-permits to our wider property portfolio.”Darren Sear, Head of Technical FM at Standard Chartered Bank.

e-permits was designed to replicate tried and trusted workflow processes for managing contractors and on-site building maintenance and repair tasks and consequently bridge the gap between well thought out health and safety policies and what is actually happening on the ground.

To discuss how e-permits can be deployed in your organisation and make its contribution to improving your risk management, please contact us here to arrange a preliminary discussion. You can read our full report on Improving Risk Management in Financial Services via that link (<–).

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