Dr Ernest Addison, Governor of the Bank of Ghana (BoG), has called on banks to build robust systems that will forestall cybersecurity incidences, strengthen their credit risk management policies, engage in risk-sharing arrangements through syndications, as well as effectively manage their operational risks.

According to him, these were necessary since the pandemic had introduced several risks in the banking space.

Speaking recently at a webinar organised by the Ghana Association of Bankers (GAB) on the topic, “Managing Banking Risks In Uncertain Times – Covid19 Test Case”, he said, “Let me highlight three major risks that the pandemic either unearthed or intensified, which must be efficiently managed by banks to avoid any unintended consequences on the industry. These are cyber security risks, credit risks and operational risks.”

He cautioned that “All the successes chalked up in the digitisation of banking systems would be eroded if adequate investments were not made for effective protection of the information technology and security infrastructure. In this regard, the bank has issued directives and guidelines such as the Cyber Security Directive that banks must meet on an ongoing basis to effectively manage cyber risk and fraud.”

Commenting on credit risk, Dr. Addison said that had become critical and required the attention of all.

“The sharp slowdown in economic activity has ramifications for the solvency of some households and businesses. Lenders within sectors strongly hit by the impact of the pandemic, particularly those in industry and services sectors, are more vulnerable.

“To possibly mitigate the risk, moratoria on repayment of loans and overdraft facilities, flexibility in the application of accounting and regulatory standards in the treatment of potential impaired loans have been emphasised by international accounting standard setters and the bank. This is why the introduction of the regulatory reliefs has proved timely and banks have responded appropriately with some form of forbearance for customers. These include rolling forward interest and principal payments, interest repayment waivers and offering new loans to enable borrowers with reasonable longer-term prospects stay afloat in these challenging times.”

The BoG Governor added that disruptions in banks’ operations and business continuity concerns orchestrated by the pandemic remained critical in these uncertain times, especially with the recent rise in the infection rate.

Therefore, “We must all adapt to this “new normal” of working and going forward, Business Continuity Plans (BCPs) must focus on end-point and network security measures with robust user authentication protocols to minimise abuse of banks’ systems.”