The Research On Operational Risk Management Of Anhui Branch Of Bank Of Communications

In recent years, it has been revealed by media that some commercial banks in our country are disturbed by serious money-stolen cases. People was wondering what the true reason is behind it.By analysis, we may find out that there are some common features among these cases. That is that external persons or bank employees or through their collusion, utilized leaks existing in bank system and were able to steal huge amount of money from banks. It resulted in big loss for both banks and customers, even damaged reputation of bank.The risk caused by reasons mentioned above can be included in the category of "operational risk". Operational risk, credit risk and market risk are three biggest risks banking industry faces to. While at present, operational risk is one of hectic topics drawing attention widely from both internal and international banks. In order to control operational risk,and raise the ability of gaining profit, many banks begin to pay more and more attention to operational risk. Banks in China are building their own operational risk management system under the promotion of CBCR. In this paper, we analyzed the operational risk management of Anhui Branch of Bank of Communications and propose some rationalization.Bank of Communications has its own risk management principles, presenting in the following three aspects. First of all, the board of directors is the highest and final decision maker on operational risk management. Secondly it has built an independent and integrity operational risk management system, including organizing a management team controlling risks by four defense lines and setting a risk reporting system with BOCOM characteristics. Lastly in the operational process, it relies on robust operational risk management system of ORMS to fulfill many tasks like risk and control self assessment, loss data collection and key risk indicator.Under the major frame of Bank of Communications, Anhui Branch has built its own systems accordingly. So far the systems are running well, indicating that Anhui Branch has already stepped on a right track of operational risk management.Meanwhile, currently there are still some problems in the operational risk management in Anhui Branch. It focuses on following aspects. Firstly a large portion of the employees have less sense of operational risk. In other word, there is no necessary atmosphere within Anhui Branch that every people alert to the risk. Secondly, education of operational risk to employees is far behind the actual requirement and there is no standard operation manual for employees to follow. Thirdly the core business system is not capable of controlling some risk area well so that employees can take these leaks to cheat or they may make mistake easily in some operational steps. Also managers often neglect teller’s work which actually is an important part for operational risk management. Last the information system used in different business lines cannot share information between them well, which leaves room for crime.I think that to improve the operational risk management of Anhui Branch, we should switch "department bank" to "process bank". On the basis of this change, the system of employee evaluation should be improved, all employees working on different business lines should be respected and treated equally. Maintenance of strong risk culture should be achieved by more lively and interesting activities. And it is also necessary to raise a brief propaganda statement and improve information system.