REASONS TO HAVE A QUALITY CREDIT RISK TRAINING PROGRAM

With higher uncertainty in the geopolitical and economic conditions, credit default risk has a higher impact to bank. It's high time for credit risk professionals to review if their banks have robust training program to elevate the competency to filter quality credits.

CHALLENGES TO DEVELOP A QUALITY CREDIT RISK TRAINING PROGRAM

Banks aiming to establish a comprehensive credit risk management (CRM) training program face three primary challenges in their quest to build a resilient and well-informed team of professionals:

1. Securing Availability of Qualified Trainers: Identifying and engaging trainers who possess both the expertise in credit risk management and the ability to effectively impart this knowledge is crucial.

2. Consolidation of Learning Resources: Gathering and integrating diverse educational materials into a coherent and comprehensive learning curriculum is essential for effective training.

3. Designing a Dedicated Training Framework: Developing a structured training program tailored to the specific needs of the institution is vital for ensuring relevance and applicability.

LOOK FOR AVAILABLE RESOURCES

The fundamental question, however, remains: Where should one begin in this endeavor?" To start a credit risk management training, we may refer to the following resources:

1. Public Resources: The Hong Kong Qualification Framework has endeavored to produce CRM Training Package which is available on the public domain for interested parties' reference.

2. Inhouse Resources: The Inhouse CRM professionals' tacit knowledge which is highly valuable resources to be retained and improved over time for the continuous inhouse talent development.

BEST PRACTICES TO KICK START A CRM TRAINING PROGRAM

To kick-start a project to develop a CRM training program, the classic steps are similar to the development of other training program:

• Identify Training Needs and Objectives: 

  • Begin by conducting a thorough needs assessment to understand the specific skills and knowledge gaps within your team. If one would like to start the development from ground zero, one may refer to the relevant units of competency published on the official website of the Hong Kong Qualification Framework. The assessment outcomes are to be mapped with one's organization's overall risk management strategy and objectives to determine the importance hierarchy.

• Finding Qualified Trainers:

  • Internal Expertise: Tape into the wealth of knowledge within your bank. Many internal professionals are well-versed in establishing and implementing credit risk management policies and guidelines. Their hands-on experience and deep understanding of the bank's unique risk context make them ideal candidates for leading training sessions. Their credibility and familiarity within the organization can enhance the learning experience for other employees.

  • External Partnerships: When internal resources are not sufficient to introduce diverse perspectives, forge partnerships with external entities. Collaborating with academic institutions, industry experts, and specialized organizations can bring fresh insights and special knowledge to the CRM training.

• Consolidation of Learning Resources:

  • Leveraging Existing Materials: Every bank has dedicated resources to monitor industry trends, all legal and compliance changes with impact on CRM. Insights from real cases are also valuable resources as foundation ingredients of training program.

  • Customed Materials: There is tacit knowledge within each organization. CRM training program designers must maintain good working relationship with relevant experts to identify valuable tacit knowledge for mining.

• Designing a Dedicated Training Framework:

  • Curriculum Development: Create a structured curriculum that covers all essential aspects of credit risk management, including regulatory requirements, risk assessment techniques, and best practices. This part is becoming relatively transparent with the Hong Kong Qualification Framework sharing valuable resources on its official web site.

• Pilot and Feedback: Before a full-scale roll-out, pilot the training program with a select group of employees. Gather feedback to make necessary adjustments, ensuring the program's effectiveness and relevance. To facilitate an efficient process, a balanced mix of target audience might be desirable as pilot learners.

• Implementation and Continuous Improvement:

  • Implementation to all employees: CRM knowledge is fundamental knowledge relevant to all bank employees. CRM early warning signals arising from different parts of an bank will be easily detected with all employees equipped with CRM sense.

  • Evaluation and Updates: Regularly evaluate the program's effectiveness with feedback from trainers, learners; and direct supervisors will enable high efficiency in training content update.