Operational risk control measures for the Lesotho banking industry to manage a crisis event : a case study of covid-19

Abstract

Banks are essential to any economy because they play an important role in ensuring financial stability. Thus, it is critical that banks always remain functional to be profitable and ensure the country's economic progress. The COVID-19 pandemic has had an impact on the economies of many countries, especially on the banking industry of those countries. Thus, the pandemic had the potential to trigger economic crises. It is therefore important that banks plan to prepare for crisis events that could disrupt normal operations and expose them to operational risks. The pandemic revealed many shortcomings in risk control measures for banks to continue to function as critical entities in an economy. This study aims to identify operational risk control measures that may be applicable for preparing banks to address crisis events. These risk control measures were identified from the literature review in a quest to investigate the impact of the COVID-19 pandemic on operational risks faced by banks. The objective was to identify operational risk control measures for the Lesotho banking industry to prepare for future crisis events. The study identified a list of operational risk control measures relevant to a potential crisis event. These control measures were subjected to an empirical analysis to determine their importance and current applicability. Using a closed-ended questionnaire, the study collected the data for statistical analysis. The descriptive and inferential results confirmed that all the identified operational risk control measures are important for ensuring a bank’s preparedness for a potential crisis event. However, although the control measures were rated as currently applicable by the banks, not all of them were adequately implemented. The study recommends that banks develop and implement the risk control measures to adequately prepare for potential crisis events.

Libanka li bohlokoa moruong ofe kapa ofe mme li bapala karolo ea bohlokoa ho netefatsa botsitso ba lichelete. Ka lebaka leo, ho bohlokoa hore libanka li lule li sebetsa molemong oa ho boloka phaello le ho netefatsa tsoelo-pele ea moruo oa naha. Leha ho le joalo, seoa sa covid-19 se bile le tšusumetso moruong oa linaha tse ngata mme se bile le monyetla oa ho baka mathata a moruo a ka amang lekala la libanka. Ka lebaka leo, ho bohlokoa hore libanka li rera esale pele ho itokisetsa liketsahalo tsa tlokotsi. Liketsahalo tsa likoluoa li ka 'na tsa senya ts'ebetso e tloaelehileng ea banka, ho pepesa libanka kotsing ea ts'ebetso. Lingoliloeng li ile tsa hlahlojoa e le hore ho khethoe mabaka a kotsi a ts'ebetsong ao libanka li ka 'nang tsa pepeseha ho tsona le ho hlalosa mehato e nepahetseng ea ho laola kotsi. Boithuto bo tsoetse pele ho hlahloba phello ea seoa sa covid-19 kotsing ea ts'ebetso ea banka. Sepheo e ne e le ho hloaea mekhoa ea taolo ea kotsi eo indasteri ea libanka ea Lesotho e ka e sebelisang molemong oa ho itukisetsa likoluoa tse tlang, tse entseng tlhahlobo e matla ea boithuto bona. Libanka tse tharo ho tse hlano tsa Lesotho li kenyelelitsoe datha tsa mohlala. Ts'ebetso ea banka e bohareng ke e 'ngoe ea tsona. Palo ea baahi e kenyelelitse ba arabetseng ba 41 ho tsoa libankeng tse tharo. Lintlha tse fumanoeng li ile tsa bapisoa ho sebelisoa phuputso, 'me mofuputsi o ile a leka ho koala lekhalo pakeng tsa bohlokoa ba libanka ho kenya ts'ebetsong litsamaiso tse bontšitsoeng tsa kotsi le ts'ebetsong ea hona joale ea litsamaiso ho bonts'a liphello tse hlalosang le tse fokolang. Mehato eohle e tiisitsoeng ea taolo ea kotsi e bohlokoa ebile e sebelisitsoe libankeng; leha ho le joalo, ho bonahala ho na le lekhalo ts'ebelisong ea litsamaiso. Tlhahlobo e bonts'a taolo ea bohlokoa ea ts'ebetso ea likotsi tseo libanka li ka li sebelisang ho itokisetsa mathata le ho netefatsa tsoelo-pele ea khoebo ha ho ka ba le mathata.