Internal HR Security Compliance and Risk Management Systems in a Major International Bank in a North African Country

Internal HR Security Compliance and Risk Management Systems in a Major International Bank in a North African Country

Thomas C. Jackson (DeMontford Bell, Spain)
DOI: 10.4018/978-1-4666-8167-5.ch011

Abstract

This case looks at an international bank operating in an emerging market, which, due to ineffective HR compliance (employees from different departments failing to communicate and not keeping up-to-date records), suffered financial losses and negative publicity. A review of the nature of employee-based risk in banking is applied to an emerging market context based on documenting a real-life incident. The mistaken repossession of a property when seeking to recover debts took place partly due to inadequate employee record-keeping, poor communication, and with the possibility of employee fraud. The bank believed that one of their defaulting customers still owned the house, even though his mortgage had been cancelled many years previously. It would appear that an employee of the bank continued to lend the defaulting customer money, based on non-existent collateral, in connivance with a corrupt attorney friendly with the bank. Banks are commonly criticized for lack of adequate control mechanisms, and this detailed case shows the even greater challenges they face in emerging markets.
Chapter Preview
Top

Case Description

The article is based on an incident in 2012 experienced by an international bank, and took place in a branch in the North African/Mediterranean region, concerning the mistaken repossession of property when seeking to recover debts. The owner of the house, absent from home on business, nearly lost her house and contents, when this bank based its seizure of her property on inaccurate ownership information. They believed that one of their defaulting and absconding customers still owned the house – even though the mortgage he had taken out with the same bank branch had been cancelled several years previously. The staff members involved operated in a small bank and were relatives and friends for many years. The buying and selling of houses frequently took place in their offices when the selling customer paid off the mortgage on the property and the buying customer signed the new deeds. In the office next door, the staff agreed loans available to customers based on the collateral of property such as houses.

Complete Chapter List

Search this Book:
Reset