How do you foster a culture of operational risk awareness and resilience in your payment system team?
Payment systems are essential for the smooth functioning of the economy, but they also entail various operational risks that can affect their reliability, security, and efficiency. Operational risks are the potential losses or disruptions caused by inadequate or failed processes, systems, people, or external events. How do you foster a culture of operational risk awareness and resilience in your payment system team? Here are some tips to help you manage and mitigate operational risks in your payment system.
The first step to managing operational risks is to identify and assess them. You need to have a clear understanding of the sources, causes, and impacts of operational risks in your payment system, as well as the likelihood and severity of each risk. You can use various tools and methods to identify and assess operational risks, such as risk registers, risk matrices, risk indicators, risk scenarios, and risk self-assessments. You should also involve your payment system team in the identification and assessment process, as they have valuable insights and experience on the operational aspects of your payment system.
The second step to managing operational risks is to implement and monitor risk controls. Risk controls are the measures and actions that you take to prevent, reduce, or transfer operational risks in your payment system. You should design and implement risk controls that are appropriate, effective, and proportionate to the level of risk that you face. You should also monitor and review the performance and adequacy of your risk controls on a regular basis, and make adjustments as needed. You should also communicate and coordinate your risk controls with your payment system team, as well as with other relevant stakeholders, such as payment service providers, regulators, and customers.
The third step to managing operational risks is to promote and reward risk culture. Risk culture is the set of values, beliefs, and behaviors that influence how your payment system team perceives, handles, and responds to operational risks. You should foster a positive and proactive risk culture in your payment system team, where operational risks are recognized, reported, and resolved in a timely and transparent manner. You should also encourage and reward your payment system team for their risk awareness, risk ownership, risk learning, and risk innovation. You should also provide your payment system team with adequate training, resources, and support to enable them to manage operational risks effectively.
The fourth step to managing operational risks is to learn and improve from incidents. Incidents are the events or situations that result in operational losses or disruptions in your payment system. You should have a robust and consistent incident management process in your payment system, where incidents are detected, reported, analyzed, resolved, and escalated as appropriate. You should also conduct root cause analysis and lessons learned exercises for each incident, and identify and implement corrective and preventive actions to prevent recurrence or reduce impact. You should also share and disseminate the learnings and best practices from incidents with your payment system team, as well as with other relevant stakeholders, such as payment service providers, regulators, and customers.
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It is short sighted to teach only from issues and problems. The best performers should be elevated as Subject Matter Experts. Utilize their abilities to train under performers and assist in onboarding. When issues, losses occur so the utmost to keep the people directly involved anonymous. Coach them alone and privately. Training materials used scrubbed for details that can identify the employees. The be very specific with the cause, the expense and resolution. Do not delay the refresher training, get the upskilling out quickly to limit exposure
The fifth step to managing operational risks is to prepare and test contingency plans. Contingency plans are the alternative arrangements or procedures that you have in place to ensure the continuity and recovery of your payment system in the event of a major operational disruption or crisis. You should develop and document contingency plans that cover the key operational functions, processes, systems, people, and resources of your payment system, as well as the roles and responsibilities, communication channels, and escalation protocols. You should also test and update your contingency plans on a regular basis, and involve your payment system team, as well as other relevant stakeholders, such as payment service providers, regulators, and customers, in the testing and validation process.
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Some of the most enjoyable moments in my career has revolves around projects that can be defined as "try to break it" stress testing procedures, training packages all benefit from small teams used to test and validate. When completing upgrades there are normally major issues that created the necessity of improvements. Use these stress points as examples of problems. Use round table discussions to get feedback from end users and those that will be tasked to report and monitor. These differing clients will have very different views of what will improve ROI, and the needs to be balanced by return and expenses
The sixth step to managing operational risks is to benchmark and collaborate with peers. Benchmarking is the process of comparing your payment system's operational performance, practices, and standards with those of other similar or leading payment systems. Collaboration is the process of sharing information, knowledge, and experience with other payment system operators or organizations on operational risk issues and solutions. You should benchmark and collaborate with peers to identify gaps, opportunities, and best practices for improving your payment system's operational risk management. You should also participate in industry forums, networks, and initiatives that promote operational risk awareness and resilience in the payment system sector.
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Collaboration is the hardest fun task. Creating cross functional teams can have a lasting impact on team strength by greatly growing the definition of 'one of us' by introducing those that have never interacted and broadening the overall knowledge base. This is another avenue to gain greater buy-in top their talents and give them solid ideas on future growth potential.
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