William Westgate is the director of the London School of Management and Leadership. A veteran banker, he was also the senior vice president of Midland Bank within the investment banking division which was acquired by HSBC. Along with his team of management experts, he is launching ‘Finance and Management Training’ in Nepal for senior and middle level banking professionals. He spoke with Terence Lee of THT Perspectives about the plans and potential of such workshops. Excerpts:
Tell us about your ‘Finance and Management Training’ programme.
This is a training programme for bankers which deals with the things that you need to know. Today, you need different skills while running a bank and what you learn while doing an MBA may not be enough. In fact 60 per cent of that may never be used as a banker. But there are certain things you definitely need to know and over the last year we have used our experience with our academic knowledge to put together a series of courses.
This will be conducted in Nepal in the first week of August and will go through the core ingredients that bankers need. For example, there are a lot of bankers out there who cannot tell you much about the yield curve. But in my experience, that’s something you need to know, as it makes a big difference.
How will this course address the challenges to the banking sector?
The banking industry has some unique problems. On average, people in the financial industry are of higher average intelligence but with higher egos and there is a lot of mobility in the industry. This can be hard to manage and I think it’s the same in Kathmandu. From Wall Street to Tokyo it’s always the same. There are a lot of solutions and we would like to bring these to manage such problems. These solutions are also used by some of the top financial firms in the world.
You met many banking professionals here. What is their feedback?
Some of the more progressive banks are very excited about the training. They realise that this is something that they will need in the next couple of years even if they don’t need it today. Again, we are not dealing with ridiculously complex derivates. While derivates are like a knife which is dangerous when handled incorrectly, it can be very useful in the hands of someone who knows how to use it.
My specialty is management and leadership while my colleagues will cover other areas like cost of capital and accounting balance sheets and how to spot a hole in the balance sheet. As bankers there are techniques that can help us spot irregularities or how to value an asset. These are the practical things that the course will deal with.
I would say that my meetings with top senior bankers have been impressive. They were really very engaging and forward thinking with clear intellect. It is very encouraging because they also feel the time is right and have committed to support such trainings. I think when you do things for the right reasons, business takes care of itself. There clearly is a need and we have to match that with delivery.
How will your programme help Nepali banking professionals prepare for challenges to this sector?
There are some problems that bankers universally encounter all the time. While we cannot pretend that Western banking models are superior, there are certain things that can help. It’s a blending that is required as Asia now has the confidence. What you can use, is some of the selective Western experiences and that’s what we offer.
I would like to be a part of the new Nepal to help develop products that help the next generation of managers and leaders. When you look at growth prospects in banking in the short term, there are a lot of concerns. Loan demands far outstrip deposits and statistics of the kind of money being buried out in the garden is shocking. This is money that is being eaten by inflation but people don’t trust the banks. But that’s an educational process because every society goes through this. I think if Nepal can get all that buried money into the banking sector that would be the first solution. A lot of people also use but don’t understand hundi and hawala. Why are these common in poor countries? People must be educated about what these things are and the advantages of the formal banking sector.
The question is — why are some countries poor and others rich? Mozambique and South Korea were similar nations 50 years ago. Why has Korea developed so much? The point here is also because of the banking system. Once you develop that confidence and people save in banks, it creates national capital which can be used to build social infrastructure. I think the central bank has its own problems and so the banks have to work together to get money into banks.
Little steps need to be taken to educate people about the advantages of banking as opposed to keeping money out of the system.
With so many banks in Nepal how important is branding to differentiate between them? Will you be dealing with that?
There are a lot of new banks and so there is a need to differentiate between them and there are things that have worked. Branding a bank is not like branding a detergent. It is a complex process. There is the huge element of trust involved because this is about people’s lives. We are talking about their savings and their future here. Branding is important because a bank does not just sell financial product or service. This is a relationship and association that needs to last for years. Selling financial products is tougher because it is long-term and emotional and there are techniques to be applied to make it effective. There are also corporate governance issues to be considered.
Nepal’s banking sector is facing probably the most challenging times at present. How do you plan to address these issues?
Nepal is a country in transition and there is always some pain involved and every country goes through that. I think there are a lot of things that can support this transition. I think the industry is ready to grow and needs such external training which is more dynamic and with examples. What we are offering is not just another academic exercise but something more engaging. We bring in a breath of fresh air and while there is a lot of dependence on Western banking theory, I think some of it is needed in the Nepali context. How to use all this will be up to the individual banks to work out for themselves. They will have to adapt it to the market demands here.
We also offer mentor coaching for those who attend the course for a year. This is important because when you learn something and wish to apply it there are always questions that you may have. We offer this coaching and mentoring possibility, because we do not just want to jump in and out of Nepal. We hope and think this will be a long association and greater interaction with Nepal.