Commercial Bank Counter Operational Risk Management Research

Since the1990s, many commercial banks at home and abroad have experienced huge losses caused by operational risks and some of the banks even bankrupted for the issues caused by operational risks, which attract more and more attentions to the operational risk management. Similar to western countries, the commercial banks and supervision authorities of China failed to give sufficient attention to operational risks that the study and practice of the counter operational risk management in China is late. Since area has been ignored for long time, every commercial bank has various problems in risk management no matter in the principles of operational risk management or in management methods. The number of cases caused by operational risks of banks is increasing in the recent years that several serious fraud and corruption cases with over100million sums happened in many big banks in the recent years, which have leaded great losses to the banks, customers and the country. Thus, operational risks have leaded great threaten to the healthy development of banks.Counters are the basic platform for routine operation of commercial banks, which are also the working areas with the most concentrated operational risks of commercial banks, the highest difficulty to control, the widest ranges involved and the highest harm grade. Most cases in commercial banks occurred in the area of accounting, which involves counter business generally and caused great loss in finance and reputation for banks, staffs and customers. It is proven that the loss of control has negatively affected the management, profit and reputation of banks, enabling counter operational risk control to be the core content of counter operational management of banks. Counter operational risks are an important kind of risks faced by commercial banks at home and abroad. Counter operational risk management plays a major role for the stable and safe operation of commercial banks.This article will begin with the background of the subject of counter operational risks, and then the importance and urgency of counter operational risk management of commercial banks will be demonstrated with the related specific cases and materials and hence the meaning of this subject will be introduced; the current situation of counter business operational risk management of commercial banks at home and abroad is discussed, and the related theories for study of counter operational risk management of commercial banks, including the definition and classification of operational risks of commercial banks, and the concept, classification, features and manifestations of counter business operational risks of commercial banks, is concluded. Combined with real work, the risks laid in each type of counter business operations of commercial banks are concluded; the reasons for counter business operational risks of commercial banks are analysed in detail; starting from the level of management of basic business outlets of commercial banks, the specific management methods to control counter operational risks of commercial banks are presented.The article consists of five sections; the specific contents are as the following:The first section is an introduction, which introduces the background and meaning of the subject, reviews the study of related areas at home and abroad, the practice of management and literature, concludes the main thoughts and structure of the article and presents the innovative points of the article and its drawbacks.The second section is a conclusion of the related theories of counter business operational risk management of commercial banks, which is revealed through three progressive levels, the definition of counter operational risks of commercial banks, the classification of counter operational risks and its features and manifestations. This provides theoretical foundation for the following analysis and study.The third section describes the expression of counter business operational risks of commercial banks, which are discussed from account management, anti-money laundering management, cash management, system operation and important receipt and certificate management, teller management, authorisation management, agency business in detail and set practical foundation for revealing the theme and further presenting the methods in the following two sections.The fourth and fifth sections are the key sections of this article. The fourth sections analyses the problems existing in counter business operational risks of commercial banks from seven aspects:the failure of personnel management, the lag of the development of business process and management system and its defects, the problems of the orientation of operation and management, the lack of execution, principle-agency problem, information asymmetry and path dependence, and subsequently analyses the existing problems of counter business operational risks and its causes.The fifth section combines the category of the risks described in the third section. For the problems of counter business operational risk management of commercial banks, the specific measurements of counter operational risk management of commercial banks are presented:1. Enhance personnel management;2. Change the orientation of operation and management, and control the ratio of marketing indicator for counter business staff assessment;3. Improve training system, enhance staff training;4. Improve internal control system;5. Strengthen the cultural development of following the regulations;6. Optimise incentive and restraint mechanism for counter staff of commercial banks; complete information transfer mechanisms to guarantee the authenticity and effectiveness of information transferring;8. Strengthen ideological education to avoid path dependence;9. Optimise and update operational system.