Human factors and cognitive psychology offer a solution to APRA’s recent risk culture survey insights. Background Between October and December 2021, APRA rolled-out 31 survey questions to 18 of Australia’s major authorised deposit-taking institutions on their organisation’s risk management practices. The high response rate (up to 59%) suggests that governance, risk culture, remuneration and accountability (GCRA) is a … Read More
What happens when a financial institution takes a traditional approach to risk, with the aim to eliminate or minimise human error with procedure laden controls and a focus on individuals’ actions? Unless the industry is highly stable with very little complexity involved, it can be like trying to fit a square peg into a round … Read More
What do financial traders, surgeons, miners, bankers, pit crew, pilots, and air traffic controllers all have in common? Their decisions often have life-impacting implications for themselves and others. Their roles are complex, high-risk, and require rapid decision-making under extreme pressure. To avoid catastrophe, they must manage the unexpected as efficiently, effectively, and safely as … Read More
THE HUMAN FACTORS OF BANKING & FINANCE The common thread in most studies dealing with financial decision-making deals with mathematical models of financial prediction. In a similar model, traditional approaches to risk management focus on absorbing or “controlling” risk to make profit (Unser, 2000). In the banking and finance industry, reducing error is often attempted … Read More