Case Study - Indonesia
Situation
In order to remain competitive globally banks were beginning to realize that it was necessary to become Basel compliant. The Bank of Indonesia needed a risk education program geared specifically towards bankers. They were committed to being Basel compliant and needed to get everyone to understand this new paradigm of banking. In order to be Basel compliant, a bank must adhere to managing a certain way, this requires not only educating employees, but changes in management as well.
Solution
In response to Indonesia’s need to create a culture of risk awareness, GARP, in partnership with Bank Indonesia and Baden Sertifikasi Manajemen Risiko (BSMR), developed the Indonesia Certificate in Banking Risk and Regulation. GARP created a learning experience in which every employee in a bank could become educated in risk management, but at a knowledge level appropriate to their job function.
GARP based this risk awareness program on the Basel II standards for risk recognition and management i.e. credit risk, market risk, operational risk and other risks. The program was then divided into standardized, intermediate and advanced approaches.
In addition, the program is backed up by more specific role skills training provided by the banks themselves and a national academy (currently being established).
Result
The certificate was introduced in 2005, and over 21,000 of the 50,000+ expected candidates have already completed two of the five modules of the program.
The outcome has been very positive, and everyone who goes through the program is “on the same page” as to what banks do, why they are there and why they are managed the way they are. Employees now have a common understanding of the “language of risk” and can relate their own role to their place within the management of their organization. They have also achieved a level of technical knowledge that fits their current role and should they choose to, they can take the examinations for the level above that is necessary for them to be fit for a future role.
