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Who Keeps Banks in Line?

May 22 2012


Banks: they’re a necessary evil. They pretend to look after our financial interests but really they’re just looking after their own. Some banks are worse than others. For example, in South Africa, banks charge people to deposit money, withdraw money, transfer money (even between accounts in the same name), and make payments, and that’s not counting monthly bank charges and other ‘admin fees’. By and large, the interest rates that banks all over the world charge on loans also borders on criminal. So, who is on the consumer’s side? Who monitors banks and ensures that they behave as ethically as possible?

Enter bank examiners.

Bank examiners are the watchmen of the banking world. They poke around behind the scenes to determine whether banks operate within the rules and regulations, whether their policies are fair and ethical, whether their procedures run smoothly and whether staff follow these procedures, protocols and keep proper records of all transactions. Bank examiners all check to see that staff are properly trained and qualified for their jobs.

Bank examiners can work for governmental departments, regulating bodies and banks themselves – to ensure that financial institutions don’t incur any penalties owing to dodgy practices.

Unimpeachable moral character

But that's not all ...

Aside from unshakeable and integrity, bank examiners need intimate knowledge of accounting practices and financial regulations. In fact, knowledge of accounting principles is not enough; bank examiners need to skilled at forensic accounting so they can sniff out any inaccuracies or possible misdeeds. They also need an understanding of the laws governing the world of finance. Experience in banking, so they know what to reasonably expect in the day-to-day operations of a bank, is also helpful.

Personal characteristics that also make for successful bank examiners include dedication, tenacity, patience, an eye for detail, a love for numbers and a willingness to travel and work long hours. Often bank examiners who work for the government or external agencies have to travel to banks across the country (or territory, county or state) for onsite audits. Examiners who work for a particular bank might need to travel to branches across the country to conduct audits. They’ll need to physically pore through records, consult digital records and, in some cases, interview employees. Because there are deadlines to work to, time management is also an essential skill.

Diplomacy rules, OK

At the end of the day, bank examiners report their findings to government department heads, agency heads and, if they work for a particular bank, boards of directors. This means that they also need to be comfortable with presentations and public speaking.

A little bit of tact will also go a long way, especially when shortcomings are revealed.

Sandy Cosser writes on behalf of Now Learning, which promotes online accounting diplomas and assorted degrees and short courses in Australia.

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