Promoting Nigeria s Banking Sector & Financial System Safety: The Role of The Chartered Institute of Bankers of Nigeria [CIBN] Segun Aina, OFR, FCIB President and Chairman of Council, CIBN LBS BREAKFAST CLUB MEETING November 6, 2013
Outline Introduction Conceptualising Financial System Safety The CIBN: Historical Milestones, Core Mandate & General Information Changing the Game: CIBN Initiatives Looking Ahead: Change drivers & Influencers Conclusion 2
Introduction Nigerian Financial System is made up of Banks and Non-banks financial institutions including Insurance, Pension, Mortgage, Capital market and the regulatory Institutions: CentralBank of Nigeria (CBN) National Deposit Insurance Corporation (NDIC) Securities and Exchange Commission (SEC) National Insurance Commission (NAICOM) National Pension Commission (PENCOM) Financial System Safety and Stability: resilience of the financial system to unanticipated adverse shock 3
Introduction Cont d Pivotal function of the Banking Sector within the Financial System Financial Intermediation role of banks and supporting economic growth Banking/Finance Crises: causes, Cyclicality, Contiguity, How various countries are addressing the issue Reputational Damage, loss of Trust and Confidence in the Banking and Finance system globally Rebuilding Trust and Confidence Avoiding actions that would imperil the industry Re-Professionalising The Challenge of rebuilding the financial system based on Integrity and Competence 4
The CIBN: Historical Milestones 5
Forerunners of professional Banking Institutes founded over 100 years ago: Institute of Bankers in Scotland 1875 (now Chartered Bankers Institute Scotland) Institute of Bankers, London 1879 (now IFS University College London) Australian Institute of Banking and Finance 1886 (now Finsia) Institute of Bankers in Ireland 1898 Institute of Bankers in South Africa 1904 6
CIBN: The Journey so far 34 State branches,4 Zonal Offices, 2 overseas branches and a National Secretariat Annex Office in Abuja. (recently purchased another property in Abuja) Incorporated as Nigeria Institute of Bankers (NIB) in 1976 CIBN Established in 1963 as Lagos Local Centre of the Institute of Bankers, London by 124 members Chartered by Act No. 12 of 1990: Re-enacted as Act No 5 of 2007 (CIBN) Governance; 38 member Governing Council (all stakeholders represented) First professional body to own a building (Yaba, 1973) - current National Secretariat opened in VI 1987 7
Core Statutory Mandates Determine the standards of knowledge and skills to be attained by persons seeking to become members of the Banking profession Competency and Skill Development Conduct professional examinations leading to the award of certificates Human Capital Development Ensure the furtherance, maintenance and observance of ethical standards and professionalism among practitioners of the banking profession in Nigeria. Ethics and Professionalism 8
Membership Analysis Corporate Members Individual Members S/No Category Category Number 1 Regulatory Institutions 2 Deposit Money Banks 3 Discount Houses 4 Development Banks Fellows 789 Honorary Fellows 60 Honorary Senior Members 974 Associates 4,856 5 Primary Mortgage Institutions MFB 1,342 6 Microfinance Banks 7 Total Ordinary & Students 99,152 Total 107,173 9
Changing the Game: CIBN S Initiatives to drive new roles A. Research-Based Policy Advocacy B. Setting & enforcing Standards: Human Capital Development C. Setting & enforcing Standards: Ethics & Professionalism D. Quality Assurance 10
A Research-Based Policy Advocacy Stakeholders Engagements: Enhance Visibility, establish new frontiers of support & collaboration; Inclusion policies & programs Study tours to leading economies & engagement with other institutions world- wide Regulators, Operators and other professional Bodies All arms of Government: Executive, Legislature & Judiciary Tertiary Institutions Enriching CIBN academic publications & knowledge events Faculty Board System (5 faculty Boards in Place) 11
Research-Based Policy Advocacy Cont d Occasional Paper Series (in view) Sabbatical arrangements with the academia (in view) Advocacy-based knowledge-sharing events Annual Seminar on Banking & Allied matters for Judges (now in its 13th year) Annual Seminar on Banking & Allied matters for Legislators (New) Annual Conference for Educators in Banking & Finance (Maiden edition holding in Dec 2013) 12
Centre for Financial Studies [CFS] A thought leadership centre with a focus on emerging and contemporary issues in the financial services industry globally. Established in 2013 Affiliation with Lagos Business School/Pan Atlantic University (PAU) 13
CFS Core mandate... Addressing executive knowledge gap Transforming Financial Services Education in Africa Discussing emerging and contemporary issues Inducing strategic thinking & stimulating intellectual excellence Sharing evidence-based ideas 14
B Setting Standards: Human Capital Development Competency Framework Developing the workforce to address skill gaps Sole Accreditation Agency of all financial service providers Competency Framework released in Nov 2012 to take effect in Nov 2014 FSS 2020 Attracting top quality talent to Nigeria financial Developing qualified professionals to meet defined standards Coordinate professional bodies serving the financial service industry Compulsory Continuous Professional Development Revamped the programmeto provide life-long learning for professionals Pursue the desire for banks to demonstrate a commitment to maintain and update skills and Knowledge 15
Setting Standards: Human Capital Development Cont d Alliances Signed MoU with Leading Institutes and professional bodies across the Glob Specialisation Developed 16 new Certifications in Specialized Areas and e- learning Planned to be an additional route to ACIB designation ACIB SYLLABUS (Effective, April 2014) Expanded the scope of ACIB Syllabus to ensure versatility of Bankers - Emphasis will be on Knowledge, Understanding and Application (KUA) 16
4 ROUTE TO CHARTERED BANKER QUALIFICATION/DESIGNATION REGULAR ROUTE Certificate in Banking HND/University Degree Recognised professional Qualifications LINKAGE ROUTE Regular Linkage Integrated Linkage ACIB PRACTITIONERS ROUTE Experienced Bankers of who have spent a minimum of 10 years in the Industry with appropriate academic and professional qualifications CHARTERED BANKER/MBA & MSC ROUTE ACIB/MBA & MSc. 17
Table 1: Revised ACIB Syllabus NEW SYLLABUS (EFFECTIVE 2014) EXAM LEVELS SUBJECTS Elements of banking Basic Economics Accounting & Business Finance DIPLOMA LEVEL Business Law Fundamentals of Marketing Inf. Comm. Tech. Quantitative Techniques Business Comm. Skills ACIB PROFESSIONAL EXAMINATION SYLLABUS Financial economics Financial & management accounting INTERMEDIATE PROFESSIONAL LEVEL Marketing of financial services International Trade & Finance Strategic Management & Leadership Corporate Financial Management CORE SUBJECTS (to take all) Banking Law, Ethics & Corporate Governance Bank Lending & Credit Administration Management of Financial Institutions Practice of Banking CHARTERED BANKER LEVEL ELECTIVES (To chose anyone) Financial Planning & Control Treasury Management Human Capital Mgt. Banking Regulation & Supervision Principles & Practice of Risk Management 18
Table 2: 16 Certification Programmes SN PROGRAMME 1 RISK MANAGEMENT 2 TREASURY DEALERSHIP 3 CORPORATE/INVESTMENT BANKING 4 HUMAN CAPITAL MANAGEMENT 5 MORTGAGE FINANCE 6 FINANCIAL LITERACY & FINANCIAL INCLUSION 7 BANKING REGULATION & SUPERVISION 8 ENTREPRENEURSHIP 9 ELECTRONIC BANKING (e-banking) 10 PROJECT FINANCE & MANAGEMENT 11 WEALTH & MONEY MANAGEMENT 12 NEGOTIABLE INSTRUMENT & PAYMENT SYSTEMS 13 DEBT RECOVERY & INSOLVENCY 14 RETAIL/CONSUMER BANKING MORTGAGE 15 NON-INTEREST BANKING 16 MICROFINANCE 19
C Setting Standards: Ethics & Professionalism Self-Regulatory Organisation (SRO)/regulated by its own laws The Practice License Framework Mentoring Programme Produced the Code Of Conduct for the Nigerian Banking Industry - recently approved by the Bankers Committee Will work with & encourage every financial service institutions to develop their own internal professional standards. Disciplinary Mechanism Investigation Panel Disciplinary Tribunal -High Court Status (Name, Shame, delist, etc) 20
Setting Standards: Ethics & Professionalism Cont d Coordinating the Bankers Committee Sub-committee on Ethics and professionalism: movement towards the creation of the Office of the Financial Ombudsman Bill anchored by Central Bank of Nigeria now under consideration at the National Assembly. Resolved 90.5% of cases reported 21
Setting Standards: Ethics & Professionalism Cont d Cases Reported 1473 Cases Resolved 1334 % 90.5 Cases Reported Cases Resolved 22
Table 3 - Performance Analysis: Sub-Committee on Ethics & Professionalism as @ October 2013 Amount Claimed 153,453,919,885.00 Amount Awarded 14,759,619,006.20 9% % 10% Amount Claimed Amount Awarded 91% 23
D Quality Assurance Becoming the hub of Financial Services Education in Africa Global linkages & responsibilities (member of Task Force of Global Banking Education Standard Board, GBEStB), Chairmanship of Alliance of African institute of Bankers (AAIOB), CIBN branches in UK/Canada/USA); IFC, GARP, Bangor University, Wales, CFA Institute/Society, etc To introduce standardized entry level examinations and certification for aspiring financial services professionals Refreshing the CIBN brand; Continuous restructuring (processes, people, technology) Changes in aesthetics, ambience, look & feel. Planned review of the CIBN Act 24
Looking Ahead 25
Key change drivers for the Nigerian banking Industry & CIBN response Mechanism Technological Advancement Cost vs. benefit issues, shared services, mobile technologies & social media, brick/ mortar branches vs. electronic delivery channels, demise of the cheque book - Redefining banks & banking Regulation Global Trends Customer Centric/ Consumer Protection Market Differentiation& Specialisation FinancialSector Strategy 2020 - Increasing compliance and Non-Compliance Cost - Regulatory burden/avoiding over regulation - Nature of the regulatory body: multiplicity and coordination of regulatory agents - Need for regulatory policy consistency - Regulatory leadership - Impact of globalisation Nigeria Institute of Financial Centre (NIFC) - Nigerian banks in foreign countries - ServiceOriented Architecture to promote customer centric approach, building relationships not transactions - Market and product knowledge: return to basics - Demography - Implications of financial inclusion - Outcome of financial literacy initiatives - Consumer protection issues - Standing out from the crowd - Market & product focus - Vision:To be the safest and fastest growing financial system amongst emerging market countries - Need for accelerated implemantation CIBN IS ON TOP OF THE GAME 26
Conclusion Commemorating 50 years of professional banking Education in Nigeria. Theme: Upholding Professionalism in Banking, Supporting the Economy 27
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