Internship at SCFB I Worked

Internship at SCFB

I worked in the Standard Chartered First Bank in Seoul, Korea. At the bank's headquarters, I worked in the Risk Finance Department. The Standard Chartered first Bank began its existence in the year 1929 as Chosun Savings Bank. In 1930, it introduced the first installment deposit product in Korea. In 1950, the bank changed its name to Korea Savings Bank, and four years later it inherited the operations, branches and staff of the Korean Shiksan Bank. In 1958, the bank changed its name to Korea First Bank, and began transaction of foreign exchange business in 1962. In 1978, the bank opened a branch in London, while establishing a local corporation body in Hong Kon during 1980. The next significant development during this year was the start of online services in all its branches, which was another first the bank pioneered in the country. The bank continued to grow, and was the first of local Korean banks to exceed 20 billion won in approved deposits. In 1999, New-bridge Capital and the government signed an Investment Agreement to acquire 51% of Korea First Bank. In 2005, the bank was acquired by Standard Chartered Bank. During this year, the name of the bank was also changed to Standard Chartered First Bank.

In its current manifestation, the bank functions as an entity that promotes its focus not only on business and competition, but also on humanity, environmental consciousness, and a general sense of caring. According to the company's Web site, the bank focuses on building relationships to maintain the health of its business. As such, its focus is on the needs of its clients, and to focus on "what is important."

In terms of business, one of the bank's value statements is that it is committed to the highest standards in everything it commits to. This includes not only its business prospects, but also its corporate citizenship. In 2002, Standard Chartered First Bank was the first to join the Hansarang Campaign, and became the longest-active donator to the campaign in 2010. The Hansarang Campaign is a corporate fund-raising campaign, for which the staff set aside a percentage of their salary that is matched by a donation by the Bank. The funds raised in this way is then used to support community interests such as health, education, the environment, and children. As such, the bank continues to contribute and encourage its staff to assist in this effort.

The bank's 2010 corporate report provides several operational highlights to indicate the growth of the bank over the year. There has, fore example, been a record income and operating profit for eight successive years. Consumer and Wholesale Banking has provided diversified sources of income growth. The bank has also promoted a disciplined and proactive approach to risk management. Organic equity generation has strengthened its already strong capital position.

According to Chairman John Peace, the bank continued to perform strongly despite difficult economic circumstances worldwide. According to the Chairman, this was a demonstration of the bank's ability to provide both its customers and stakeholders with substantial and sustained value.

Specifically, the bank's income increased 6% to $16.1 billion. Profits before taxation rose by 19% to a figure of $6.12 billion. Normalized earnings per share rose by 14% to 197.0 cents. The proposed annual dividend was 69.15 cents per share, which rose by 9%.

According to the Chairman, the cumulative outcome is that the bank has increased its income, earnings per share, capital ratio and total dividends. According to the report, the bank has shown itself to be committed to value in terms of its stakeholders and its function in the banking sector. In addition, it provides value to its customers and its community. As such, the bank functions as a socially responsible corporate citizen that has shown steady growth over the years of its existence. It was a privilege for me to complete my internship at this institution. I learned much about the financial sector, and how the various departments work together to provide value in all the different sectors of the community within which the bank functions.

b)

I obtained the internship by replying to an advertisement in an online newspaper. The Human Resource Department at SCFB helped to process my resume and cover letter. I provided information about myself, my academic career so far, and my aspirations for the future. These resulted in my successful entry for internship at the bank.

c)

When I arrived for my first day, the executive director I was to work under explained the functions of his team. This was a general type of orientation to help me see how the team functions together and what the greater purpose of my work would be. Team work seemed to be of great importance in this regard. Every team member worked together to accomplished the goals of the department specifically and the bank generally.

From my second day onward, the senior officer who would oversee my work took over the orientation. The officer oriented me regarding my specific tasks and the nature of the work that I would do. There were many details and I was able to learn much about what my job would be. The people who oriented me took great care to help me understand what I was to do.

d)

As part of my duties, I was involved in assisting with RWA and RORWA analyses. I used the Microsoft Excel and PowerPoint programs to create charts to indicate the steps and results of my analyses. These analyses involved determining probable risks and returns when all the products and functions of the bank are taken into account. Products such as loans, for example, could carry a significant risk, especially in terms of new business loans, where the certainty of success is relatively low. These types of analyses help banks and businesses determine the extent of their risks and returns. It also provides a platform in terms of decision making to create a good balance between risk and return, and to ensure that the high-risk low-return products do not override the presence of more profitable products such as high-risk high-return products or low-risk high-return products.

Another part of my duties was to attend meetings with other departments involved with the Risk Finance department. From these meetings, I was able to learn a large amount in terms of team work, creating ideas and brainstorming with other professionals in the field. Eventually, I was able to provide some contributions to these meetings.

e)

My major is Finance. By working in the Risk Finance department, I was able to use the skills and knowledge I have built during my years of study to create the risk analysis documents mentioned above. The work also supplemented the learning I have acquired so far very well by teaching me computer skills and methods of analysis that I can now use to enhance the work I am doing for my major.

In addition, interacting with teams of other professionals in the field, I was able to see the application of the concepts I have learned in college in real-life financial situations. This was tremendously exciting to me. Attending meetings and working with others in teams, as well as an individual, made the profession come alive for me. I feel that this internship will enhance the future work I will do towards the completion of my studies. I will be able to devote more enthusiasm and time to my studies, since I now have a much deeper understanding of how the concepts relate to real-world situations.

Furthermore this understanding has made me enthusiastic about standing in a financial profession myself after the completion of my studies. This in itself is a powerful motivating factor to give everything I have to the success of my studies.

Another significant factor is the way in which I was able to see the concepts I only knew in theory become real effects in the real financial world. This is where my work with financial risk analysis provided me with great insight. The documents I created were not simply an exercise for a class where I would be graded on my performance. In the bank context, one misjudgment could have significant effects on the ability of the bank to maintain its profit margin. It was therefore with some sense of awe that I participated in the functions of the Risk Finance department at the bank.

In short, an experience like this changes one's life and perception to such a degree that one cannot return to the classroom without feeling a profound sense of new meaning in one's work. I enjoyed this experience very much, and it is my hope that I can use it to enhance my future studies, as well as in the application of my future function as a Finance employee.

f)

I had several defining moments during my internship. The first of these that I can recall was when I finished the Consumer Bank and Wholesale Bank RWA and RORWA analyses I was working on. These were major projects and I spent a large amount of time and effort completing them. It was also a significant learning experience for me, since I was able to use the skills I learned during my college years and apply them to a real life situation. I therefore felt very satisfied with my work on a variety of levels, not least because I felt it was worked well and professionally done. I was very pleased with the finished product. I felt it was my first truly important job in a professional setting. It was a wonderful and satisfying experience.

My second defining moment was a conflict situation that arose between my executive director and CFO. What happened was that the Korean Financial Supervision Institute required the bank to use the Economic Capital method in the Internal Capital Adequacy Assessment Process (ICAAP). My executive director, who is Korean, wanted to maintain the existing use of Economic Capital. The British DFO, on the other hand, wanted to change the use of the regulatory capital method, since this was required by the British Financial Supervisory Authority. At its basis, it was therefore a conflict that stemmed from different nationalities and loyalties, while culture possibly also played a role. What defined this conflict for me was the way in which it was resolved. The CFO and executive director reached a compromise by using the varied Economic Capital in ICAAP in the Korean branch. In this way, the method would satisfy the local Financial Supervision Institution's requirements, while some of the requirements in Britain were also satisfied. They also agreed to investigate, prove and report the value differences between the Economic Capital method and the regulatory capital method. What was interesting about this is that it required the two professionals to work together in a productive and functional way to reach a common goal. Despite the fact that they were in disagreement about the best single method to use. Later, the variations in regulatory capital reported for the British FSA would help the Standard Charted Bank to vary Regulatory capital. The final outcome was that the head CEO in Britain allowed the use of Economic Capital in Korea to satisfy the local regulation.

What was important for me in experiencing this conflict was the fact that two professionals with completely divergent opinions were able to resolve the conflict without letting it escalate to a full-blown disagreement or even a "fight." Instead, they provided an excellent example of effective conflict resolution that ultimately resulted in a complete resolution of the situation itself. Furthermore, by compromising, they also created an opportunity to work together effectively, and ultimately they created a platform for a solution and for working together in the long-term. This type of conflict resolution is good for any business, since escalating conflict creates a situation where employees and managers either relocate or create an unfavorable atmosphere at the workplace. Replacing managers affects a significant proportion of the business, and it is likely that a significant period would be required to return all the functions of the business to their previous status of optimal functioning. On the other hand, when conflict is resolved amicably, the negative effect upon the work atmosphere and functioning is much less pronounced. This is an important principle that I will be able to use for the rest of my life in my business relationships.

A third defining moment during my internship is the strikes that occurred during this time. This is probably the most intense manifestation of corporate disagreement. Observing these strikes provided me with a vast amount of information about conflict, negotiation, and resolution. At the heart of these lessons is the understanding that the lifeblood of any business is its employees. Without them, the business cannot succeed. It is therefore vital that managers do what they can to provide employees with a sense of purpose and satisfaction in their work. When the specific reasons for the strikes in question are observed, it becomes clear that there is a link between worker satisfaction, work excellence, and the health of a company.

The first strike, as reported by Cynthia J. Kim, lasted for only one day. At the heart of this strike was the managerial proposal of a change to the payment system from its current basis on seniority to one that is based on performance. The reason for the proposal was to provide an incentive for employees to perform better in their work.

However, the fundamental flaw in this reasoning is that managers did not take into account the existing satisfaction levels of employees. From the article, it also does not seem that employees were consulted before the proposal was made. A major transition like this, especially where the livelihood of employees is concerned, requires a sensitive approach. At bottom, the most important consideration is that payment is one of the primary drivers of work satisfaction. The scale of the strike implies that very few, if any, employees were satisfied with the proposed change. Another important consideration is that, employees who are not happy with the way in which salaries are awarded are very unlikely to be satisfied in their work, and will furthermore be unlikely to provide the desired improvement in performance.

On the other hand, it can also be understood that managers want to provide incentives for their employees to perform better, especially since the bank is providing a service to the public. The reputation of the business therefore depends upon the level of service provided by employees. The principle that drove the decision to change the payment structure is therefore sound. However, the flaw lies in the fact that employees were never consulted. In today's business world, employees can no longer be treated like automatons who are expected to simply accept decisions handed down by management. Concerns like salaries, which directly affect their well-being, should be fully disclosed and discussed with all concerned. It should also be ensured that an agreement is reached that is favored by all concerned. There should be a recognition that both sides have valide concerns: management seeks improved performance; and employees seek continued financial well-being and job security.

The employees involved in the strike as cited appear to be willing to negotiate, having engaged in strike action only for one day, after which they stated their willingness to meet with managers. It is important to note that they also indicated that a lack of concession from managers would result in further strike action.

The second article, by Kim Yon-se, indicated that the negotiations were, after all, unsuccessful. More than half of the bank's wokers proposed to strike following the negotiations, in which management made several concessions and compromises regarding the proposed change to the salary system. From this article, it appears that the union members do not wish for any compromise, but rather for the salary system to remain as it has been. There is no willingness to concede on the part of the employees.

What becomes clear from this type of conflict is that the unwillingness to compromise on the part of one of the negotiating parties results in an impasse and prolonged conflict. The main problem is that these employees hold considerable power over managers, as strike action could cripple the functioning of the institution. Although the bank would send non-striking employees to the branches most affected, a prolonged strike would severely affect the ability of the bank to maintain excellence in its customer service sector.

The question is then whether management should yield to the striking workers and maintain the status quo of the seniority-based pay system, which has been the protocol in Korean business of the kind. The main driver for the proposed change was the projection of increased competition and improved customer service. However, the way in which the change was proposed was faulty to begin with. Management simply proposed the change without negotiating with employees. This was a shortcoming on the part of management and it instigated the conflict. The conflict, however, continued as a result of the failure of employees to compromise, even in response to a much improved offer that would be to the advantage of the employees affected. A later article reported that, after three weeks of strikes, the bank was considering closing 43 of its branches temporarily to prevent work overload for the remaining employees.

The main reason for the continuing strike was that the bank's concessions appears "insincere" to union leaders. However, the continuing strike appeared to bring neither managers nor employees any positive outcomes, since the bank was driven by a mandate from its headquarters. Perhaps a good compromise would have been to accept the bank's offer. In the even that it indeed proved to be insincere, employees would then be within their right to strike.

Personally, observing these strikes was a defining moment for me for several reasons. First, the sheer scale of the strikes was significant. It was quite an experience to see so many people striking at one time. Not having been part of this type of workplace before, this was certainly a first experience for me.

Secondly, the strikes taught me much about critical thinking and negotiation. I was able to think critically about the information provided in the articles. I do not believe that there was insincerity in the bank's modifications to the agreement, and that the perpetuation of the strike was the fault of union leaders and employees. On the other hand, the strike might never have begun had management initially discussed the proposed changes with employees. In a business situation, communication between employers and employees is vitally important. It is only by maintaining open communication that damaging actions such as strikes can be minimized or prevented. However, like the conflict between the officials mentioned above, all parties involved in a conflict situation should be willing to concede to the efforts of the other to improve the situation.

In general, I learn much about both conflict and its resolution, both from observing the strikes and from observing the way in which employees and employers at my workplace interacted with each other. It is an invaluable experience, and I will be able to use these learning experiences throughout the rest of my life as a student and employee. Strikes are still a significant issue in Korean financial institutes. I find that this was the most important of my defining moments during my internship.