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Here you’ll find the latest events and happenings from contact centres in Wales, as well as food for thought from the people who know the industry best.

Risk and Finance. Dr Kumbi Mabwe, University of South Wales

Kumbi Mabwe is Senior Lecturer in Financial Services in the Faculty of Business and Society at the University of South Wales with expertise in bank management, bank  performance and risk management.

She talks about how the global financial crash of 2009 proved a blessing in disguise and helped focus her broad and deep knowledge of the financial services. She also gives an insight into the complex but fascinating issues and concepts surrounding risk within the financial services across the globe.

Listen to and download the interview here  

“Risk itself is very wide and is understood very differently by different people. Basically, when you look at it from a business perspective it is the uncertainty in terms of achieving your objective, so a business would set its objective, they know what they want to achieve, they want to create shareholder wealth, but what are some of those hindrances they might face in achieving those objectives? That is what risk kind of is!

It is the obstacles preventing you from achieving those objectives, but my area of expertise is actually risk management which is when you are looking at how people or organisations identify those obstacles or hindrances and how they evaluate them and manage them so they can achieve their objectives and therefore create shareholder wealth.

In 2009 when I started the one plus three PHD, before that I was working for HSBC, this was after completing my MSC in Investment Analysis with The University of Stirling which is an MSC looking at banking, especially investment banking.

So I graduated in 2008 with a distinction and I was recruited by HSBC working in their market pricing department so generally it was in investment banking in the back office and our team was all about setting global accounts for the global custody, we were custodians for various clients and also we did pricing bonds, equities, so that involved extracting prices in Bloomberg and Reuters and making sure everything is working for the other teams within HSBC.

So it was from that first Master’s in banking and then the work experience in HSBC that got me interested in banking because before that I had done a degree in accounting so it was a career change when I did a banking course and I thought it was more interesting than accounting so that was my career change and that got me interested in risk.

While at HSBC the crisis hit and unfortunately or fortunately I lost my job and it was just before I was told ‘you are one of those’ that I managed to embark on the PHD

 

The focus of the PHD was inspired by the banking environment and the risks that I was seeing there and what I was observing  without actually putting it into an academic perspective and I was actually doing risk management so we used to do exercises on operational risk to see that you know what you are doing and how it impacts the organisation

So after academically and industry-wise risk kind of soar and upsurge after the crisis, compliance for instance sprouted after the crisis. Some banks actually created a division called compliance, but for me compliance is all about risk management but because of the regulatory influence they decided to have someone dedicated to dealing with compliance because regulation was on everybody’s case especially the bank’s case to say ‘how come you are in this mess and we are coning to have to rescue you?’

We also have things like conduct risk which comes out of the PPI and how banks conduct themselves so there is a body there and a framework of how banks should conduct themselves and again when you say conduct risk. It is the risk that the bank is going to conduct itself in a way that is inappropriate and end up being fined, but again linking in to my PHD I’m saying, this is not about the bank as we know it, it’s about the people who are in there. It’s not the whole bank that is mis-selling PPI, it is that one person who has been trained by another person

I recently joined the University of South Wales in September before that I was lecturing for Glasgow Caledonian in their London Campus. I was lecturing Bank Management and Operational Risk as well as International Economics for Master’s students, so in terms of the kind of students I was lecturing they were doing International Marketing and Economics and International Banking and Finance and Risk.

I was also teaching Bank Management which is basically how to manage a bank and then how to manage operational risk as it is one of the top issues in the financial world. I did that from 2014 until 2016 when I moved to Cardiff.

Before lecturing at Glasgow Caledonian I was doing my PHD in Risk Management in Banking, or you could say Risk Management in Financial Services because I also touched on insurance, governance as well as broader risk management but I kind of narrowed it down to people risk in operational risk and my focus was on the non-quantitative aspect of operational risk.

The point of departure was banks could have all these models, they could do their stress testing, they could have that capital figure which they had acquired, but we continued to see all these scandals, we continue to see the rogue traders, so what is it that it is missing?

So I tried to venture into the qualitative side of risk management which is kind of ignored by the quantitative side so I did that from 2010 up until 2015. It is a process I enjoyed because I got to meet the operational risk managers across the UK and got an insight into it that you wouldn’t read from a text book because it was practical experience and looked at the challenges they were facing and where they think the industry is going with risk management itself.

Before my PHD I did a Master’s of Research which is an entry into the PHD, so it gives you all the essentials on how to do research and I did that for a year. It was actually part of the PHD which was a ‘one plus three’ which means you do one year where it is only research orientated, so in my case I did not need to touch on my PHD until I completed that because the way it was structured meant that it was kind of a Masters, so it was a Masters of Research in Business but the good thing was it prepares you into all the essentials of doing the PHD designing the questionnaires, how to choose your paradigm, so it was a Master’s with 12 modules and a dissertation.

When you come to the dissertation you can narrow it down to your dissertation topic so you start doing the PHD topic then, obviously on a smaller scale because you don’t want to replicate it when you finally have the three years to do that.”