Strategic Risk/Management Assessment Plan Strategic mission of Bank of America Mission To be the No. # 1 Bank in the world Strategic Objective develop of new products and services for the consumers strategic entries into fast growing economies of Asia and other developing countries Optimum market consolidation through strategic alliances, mergers and acquisitions. The bottom line: to ensure that all debts are good and realizable and make strategic investments in non banking areas like investments, stock markets etc.
for higher returns. Bank of America has followed a high profile banking portfolio and has always kept the interests of its customers as its primary objective. Since its inception it has pursued a policy of caring for its customers and in recent times “our priority is organic growth: our strategy is to deepen: to expand relationships and to focus on quality of service. ” (Bank of America Corporation, 2007).
In the area of commercial lending services it seeks to provide value addition to customers while at the same time enter into cordial and lasting business relationships with them for mutual gains. Since the markets have become very competitive, it has become necessary to seek new innovative banking solutions to offer to clientele and also enhance the quality and value of services being provided to them. In the commercial lending, the bankers could offer a wide array of loans, cash credits, overdrafts and limit facilities at attractive rates, in according with the directives of the Federal Bank and in conformity with the existing norms governing interests. The commercial lending division in the bank offers financial assistance of over $15 Million for the industry’s requirements of working capital, mergers and acquisitions, internal and external reconstructions and also for business expansions and new ventures.
These loans are at flexible options and are designed and executed for the ready availability and convenience of customers. “Bank of America and its affiliates are committed to providing comprehensive financial services for your evolving needs.
The asset management group gives institutional, high–net–worth and individual clients access to customized, innovative financial and investment management solutions. ” (Asset Management, 2007). However, in recent times the bank is facing competition not only from the domestic banks within the country, but also from non banking companies and institutions, who have entered the banking sector in a large way. As a direct result of these forays by Non Banking financial institutions, the margins have lowered and the credit lending has also come down and interest rates have to be maintained at par with the other players and also government directives and regulators.
The squeeze on credit has impacted on the commercial lending of the bank, and it is believed that in the years to come, the bank may have to seek other alternatives sources of hiking profits by seeking recourse in non banking high yielding investments, like stocks and securities trading, and other high profitable ventures. Operations Objective: Mission To control costs and enhance customer oriented services Operations Objective To be able to withstand the competitive markets and economic fluctuations in market To focus on customer service and support and make strategic decisions regarding it To train and equip people to achieve their optimum development capacities The bottom line: Through a continuous process of training and retraining people, it is possible to make them efficient and competent to handle all areas of corporate accountability in the bank.
In the areas of corporate lending, the aspects of operational control and accountability are high and so also the need to be able to withstand competition from competitors like Citibank, Wells Fargo, etc.
In this regard the $ 62 Billion Merger between NationsBank and Bank of America to form Bank of America Corporation in 1998 is of special significance since it paved the way for synergistic achievements and broading of the customer base of the newly formed banking entity. This strategic alliance has also improved the realization of recoverables from loanees which in the past has been a major issue confronting the bank, since a large chunk of loans given by the bank to borrowers had turned bad or irrecoverable, and the bank had to incur heavy losses on this account.
However, despite the setbacks it is seen that Commercial lending, especially in the retail sector has been a major strength area for the bank in recent years. “Whether you represent a multinational corporation, a midsized business or an institutional money management firm, we bring together the right combination of industry, market, regional and product expertise, and resources to meet your specific needs-while building a lasting client relationship. ” (Achieving your vision, 2007). Financial policy: to ensure reliable reporting Mission To ensure that compilation of financial statements are in accordance with directives Financial Objective To increase the net income of the Banking Corporation To increase the equity investments To enhance shareholder value by enhancing net earnings The bottom line: Through a policy of judicious and market oriented strategies, along with cost consciousness and effectiveness, it seeks to enhance shareholder value.
Bank of America has always maintained transparency in financial disclosures of accounting statements to its stakeholders and the public and has always respected the legal regulatory measures and guidelines issued by public accounting regulatory bodies and the federal government in the matter of preparation and presentation of financial statements. A uniform accounting standards are maintained through the global operations of the bank which are duly audited by internal accounting professionals and independent accounting firms.
(Legal) Compliance Mission Strict adherence to the 4 tier governance model for legal implementation Legal Objective Directors and senior management responsible for legal compliance Professional accountants responsible for accounting compliances Emphasis is on people and use of technology for assertion of compliance.
The bottom line: “On a structural level, Bank of America has established a security compliance framework that includes commitment and accountability, policies and procedures, controls and supervision, regulatory oversight, monitoring, training and awareness, and reporting. ” (Allen, 2006). There are certain legal issues relating to customers’ interaction with the bank that could become a major cause of concern, especially when the question of money laundering, or the use of funds for terrorists activities are concerned. Banks may sometimes, unwittingly or without deliberation, become parties to illegal activities by allowing funds to be parked, or taken, through banking accounts, maintained by suspect persons.
Therefore, it has become necessary for Bank of America to bring out Policy statements relating to transactions of alleged money laundering or other criminal activities. Although it may not be always possible to trace the origin of banking trasactions, it is necessary for the bank to take necessary precautions, in order to avoid future legal actions arising out of innocent dealings with criminal individuals, agencies or organizations. (Bank of America Anti-Money Laundering and Anti-Terrorism Financing Policy Statement, 2007). Therefore, the bank would take all necessary steps to ensure the identity of the customers or the beneficiaries of banking transactions.
The bank should refuse to accept tainted money, or funds, of which it is fully convinced is illegal funds arising out of money laundering transactions. The bank would also be fully prepared to co-operate and assist the law enforcement agencies in enforcing the necessary laws pertaining to these transactions on individuals, agencies or organizations. The bank would not have anything to do with individuals who provide false identities, addresses or other false information in order to enter banking transactions intended for, known illegal or unlawful activities.
All the above stipulations are being honored by Bank of America Corp. as part of co-operating with the relevant authorities in enforcing legality and the highest standards of banking ethical practices in the dealings with customers and the public. Reference Bank of America Corporation. (2007). Company history. Retrieved December 4, 2007, from http: //www. answers. com/topic/bank-of-america-corporation? cat=biz-fin Asset Management. (2007). Bank of America. Retrieved December 4, 2007, from http: //corp. bankofamerica. com/public/public. portal? _pd_page_label=products/assetmgmt/index Achieving your vision.
(2007). Client-focused solutions from a global financial leader. Bank of America. Retrieved December 4, 2007, from http: //www. bankofamerica. com/global/hs_home/index_corp_aboutus. cfm Allen, Julia H (2006). Security is not just a technical issue. Two measures of security governance. Build Security In. Retrieved December 4, 2007, from https: //buildsecurityin. us-cert. gov/daisy/bsi/articles/best-practices/management/563.html Bank of America Anti-Money Laundering and Anti-Terrorism Financing Policy Statement. (2007). Bank of America. Investor Relationship. Retrieved December 4, 2007, from http: //www. bankofamerica. com/investor/index. cfm? section=laundering