INSIGHTMidyear 2018

EMV Visa Classic & Classic Plus card Pg#6

Health Insurance Pg#7

Kill the culture of Nice Pg#13

Speak Up (Compliance) Pg#19

City of God Pg#37

CONTENTSAn Interview with CEO

An Interview with COO

EMV VISA card

Business Banking (health Insurance)

Service Quality

Procurement AT MMBL

Kill the culture of Nice

Risk & IT Security Management

Ethical Compliance

Laughter Time

Success Story

Picture Gallery

Travel Diaries

pg 1

pg 3

pg 6

pg 9

pg 7

pg 12

pg 13

pg 16

pg 19

pg 21

pg 23

pg 25

pg 36

We are pleased to issue a new edition of banks in-house magazine “Insight”. We hope you would enjoy reading it.We have tried our best to make this issue more interesting and informative. Interviews by CEO and COO give us the idea what our top men are thinking and where we might be heading in near future. We have also tried to cover the things which are relatively newer to our audience and they want to know more about them like segregation of risk department from credit and appointment of global compliance officer. We would like to thank those who participated in this publication via their writings and would urge everyone else to do participate in coming editions so their achievements can be highlighted. We would also welcome any sugges-tions to improve this publication

Happy ReadingMarketing Team

Editor’s Note

An Interview with

CEO & President

Ghazanfar AzzamQ. What were the goals of MMBL for 2018 and how far we have reached achieved in achieving these goals after six months have passed?As you know the Mobilink Bank is the largest digital bank in the country with over 13.7 million mobile wallet customers and one of the two leading players in branchless over the counter transactions, the first priority of the banks was to have a robust TMS (Transaction Monitoring System) to ensure that large number of transac-tions processed by the bank can be tracked, analyzed properly and identified to prevent misuse of banking channel by unscrupulous elements. The TMS is now fully functional and implemented.2ndly digital technologies are impacting all businesses the way business is done, customers acquired and serviced and so on and so forth. The Bank therefore decided to upgrade its core banking system T-24 and digitize lending operations. Both of these projects are at advanced level of implementation and are likely to be completed before end of 2018.

Q. As MMBL is one of the leading microfinance banks in Pakistan, what growth strategy we are going to follow in the next two years?As I just said, the whole world, particularly banks are rapidly adopting digital technology and therefore our key emphasis remains on increasing effectiveness of our digital channels for increasing savers, introducing digital lending products and promoting digital transfers and payments. Our first digital lending project is in the pilot stage. Along with digital initiatives, the bank will selectively increase touch points across the country wherever con-sidered necessary.

Q. What do you see are biggest challenges Microfinance Industry in Pakistan is facing and what is the way forward to tackle them?Even though all institutions are trying, selecting right kind of technologies for better customer experience, improved controls and getting the IT strategy right is currently the biggest challenge facing the industry. Institutions that will make better use of technology will surely grow faster, will have more satisfied customers and efficiency and productivity will also improve. Having well trained, skilled and motivated human resourc-es is another challenge as ultimately quality of an institution depends on quality of people managing and running that institution.

Q. MMBL recently went through some restructuring in past few months, how helpful it was in setting bank’s future direction?I think, contrary to apprehensions, restructuring has helped the bank to fill the gaps in its management and operational teams by bringing in expertise in operations management, risk management, AML & CFT man-agement and other allied functions. There is more depth in the management team now to handle operational challenges much more effectively. The bank is again ready to resume business growth.

Q. As compliance remained main focus for the bank during first half of the year, do you feel we have achieved our goals in this regard and what areas still need attention?Compliance is a permanent function in all banks and so is in MMBL. However, compliance agenda that the bank’s board of directors had set specifically in 2017 has been fully achieved within the timelines prescribed. The challenge for the bank and the staff is to remain always compliant with laws, regulations, policies and procedures in their true spirit. The bank has been conducting various awareness and training programs to ensure that compliance requirements are understood and implemented by all staff.

Q. Being a corporate leaders for many years, what message you would want to give to your readership keeping in view current market requirements and business needs?

I see huge opportunities for growth of the bank and the entire microfinance banking industry for many years to come as the market is still unserved to a very large extent. However, we need knowledgeable, skilled and hardworking people to achieve and maintain extra ordinary level of performance in the years to come as we have done since inception of the Bank. My message therefore is of hope. We can beat any and all challenges and maintain our tradition of achieving extra ordinary results

“ Quality of an institution depends on quality of people managing and running that institution”

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An Interview with

Chief Operating Officer

Usman Bajwa• A brief overview about your background and work experience?I graduated from the MBA program of Lahore University of Management Sciences in 2001. My first job was with a local large textile exporter. After that I had brief stint with consumer banking division of Citi-bank Pakistan operations. It was a time when Telecom sector in Pakistan was at the cusp of takeoff. I decided to join Mobilink and saw the company grow from less than 3 million customers to 30 million customers within 3 years. This period of hyper growth presented myriad challenges and growth opportu-nities to me professionally. This also played a key role in forming my managerial and leadership skills. Around 2010, I got involved in setting up/ acquiring a bank to launch Mobile Financial Services. I was part of the team that explored multiple options ranging from acquiring an existing bank to setting a new one up. We finally ended up deciding to get a new micro finance banking license to build from scratch.

• How different your new role has been from your previous roles?I served as the board member of the Bank for five years that provided me with an opportunity to be involved in setting the strategic direction of the Bank but being part of the management team is very different. My previous role as Head of Jazz Treasury was a very specialized though the scales were huge whereas my new role is very diverse, I have got an opportunity to lead very diverse and wide spectrum teams which in itself is a very exciting and fulfilling experience.

• What challenges have you faced in this bank being on COO position?I have been lucky to have very good teams at the Bank that have allowed me to have smooth landing in the position. The fact that I served at the board for good five years and have been involved in setting up the bank has also helped. On top of that the CEO, Ghazanfar Azzam has also been super supportive and wel-coming which has made this transition very seamless for me. So overall the transition has been quite smooth though there are differences in cultures and scale of the two organizations.

• What changes have you brought to bank’s governance and management structure since your joining as COO?I strongly believe that a leader is only as good as his/her team. One of my first areas of focus was to get the right people at the positions which were vacant. We didn’t have a permanent CTO. The positon of Chief Risk officer was also vacant, in fact the risk department was to be decoupled from credit and have a sepa-rate organization of its own. We have been very lucky that we have very competent and forward looking resources to fill these two positions. They are fully capable to take their respective functions to level where we require these functions to be in future for us to operate as an efficient organization. We have rolled out a plan for revamping the branchless operations through targeted intervention of technology and reengineering of processes. We hope to complete that within next six months. In parallel, we have started analyzing the structure of our branch operations to find and implement an optimum structure. You can expect to see some changes in that in near future. Our head of operations has been a lynchpin of this effort. At the governance level, I think we are making a good progress under the leadership of our Chief Legal Officer. We are trying to have a more functional and empowered board of directors in place. The frequen-cy and organization of board and committee meetings have shown a marked improvement and this is also acknowledged by our board members. Our objective to have a “future proof” organization and governance structure that can withstand the demands of rapidly changing environment.

• What are major risk and compliance areas which would be getting more focus in second half of the year 2018?We as a bank grew quite exponentially in last 2-3 years effectively doubling our size. Our risk and compli-ance areas couldn’t keep up with the pace in business growth resulting in certain shortfall in our systems and processes. However, in last year or so we have rightly focused on risk and compliance areas and I am pleased that we have covered good ground. However, we are not there still. We still need to further improve our processes, systems and above all have a compliance culture at all levels. We as management would continue focusing on these going forward. It is very important for all of us to promote the culture of doing the “right things” that needs to be owned and adopted at all levels within bank. One risk that we foresee emerging is the credit risk in the second half of the year, this is something which is on our radar and we are trying to take preemptive corrective measures.

“I strongly believe that a leader is only as good as his/her team”

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EMV

Debit Classic & Debit Classic Plus Card

MMBL becomes 1st microfinance bank in Pakistan’s microfinance industry to introduce

• Where you see MMBL in regards to digitization as of now and how soon we would be able to achieve paperless environment for all our processes?I don’t see digitization being limited to removing papers. It is much broader than that. There are three main areas we need to work on to make our Bank a truly digital bank. First is to be able to offer digital products to our customers. I think we are doing well on this one. We have already launched digital lending product in pilot phase. Offering digital products is where the future lies. In my opinion we are doing well on this front given the regulatory constraints. This product if successful can change the way banking is done is Pakistan. The second area is digitizing our interfaces with the customers. In this area also we are making good prog-ress. We have undertaken a project to eliminate the loan application and open account digitally. Once com-pleted we will be one of the first banks to achieve that. The third component is digitizing the internal processed and system. This is an area I think still a lot of work needs to be done. We not only need to digitize our internal processes through automation but need to critically look at our processes also. We are working to have the enablers in place. We are making the right technological tools available. For example, we have already implemented a state of art transaction monitoring tool that eliminates the manual transaction mon-itoring. Similarly, we are in the process of upgrading our core banking system to a latest version, that will give us more options to reassess our processes and further digitize our operational activities. • Do you feel that current focus on compliance is just a thing that we have to deal only in these days or it is part and parcel of any successful organization?Focus on compliance is irreversible not only in Pakistan but globally for all financial institutions. However, we need to find smarter ways to compliance. Being smarter means, that we need to maximize the return on compliance initiatives and not let it become a drag on the business. For that, the front line of business needs to takes greater responsibility. It has to be a way of life for all the employees. The thinking that compliance is responsibility of one or two departments will be counterproductive.

• What do you feel, where microfinance sector is heading in Pakistan in near future and how we need to change our strategy to better benefit from these changes?I feel there still is a huge untapped potential in microfinance sector in Pakistan. However, I feel to really capture that there are two key strategic imperatives. One we need to start focusing beyond conventional mostly rural based lending operations. We need to properly segment the addressable market and challenge would be to come up with innovative products catering to needs of different segments. The second one is to use technology and Big Data especially for micro businesses to shift away from traditional loan origination and approval approaches.

• What are major operational challenges you see bank is facing and how are we handling them?There are certain structural issues in our operations that we are trying to fix. Our operations have evolved in a “reactionary” fashion. Whatever was required from us for supporting MFS was done most of time by creating supra structures. This has resulted in certain inefficiencies to creep into our operations. We didn’t do a great job of being futuristic about the requirements from mobile financial services. We are fixing it now. On the branch operations side also requires a thorough review and analysis. In the end, to fix the oper-ations we need to focus on technology as well as processes. Unless both these ends are fixed, we cannot claim to have “gold plated” operations. The good thing is that directionally we are moving in the right direc-tion and a have clear objective in sight. Adoption of digital tools is critical in achieving that objective. That is an area that needs significant improvement. We in past have spent time, effort and resources in develop-ing multiple systems but there is a serious question mark on their adoption. So we are trying to shift focus of our IT department from development/ procurement of systems/tools to optimum adoption by the users.

• Are we satisfied with our performance in first part of 2018 and what are our plans for remainder of the year?I am broadly satisfied with the performance. All key performance indicators are in line with expectations. For most part of first half of this year and last half of last year we as management were focused more on the controls, risk management, compliance and governance. We have done a great work in remedying SBP audit points, kudos to the team for that. I believe that we are now better prepared to re-initiate our growth having the confidence that our controls, risk and compliance functions are better equipped to withstand the growth in business.

EMV is Europay, MasterCard, Visa. It is the global standard for chip-based Debit and Credit Card trans-actions. It is a joint effort between Europay, MasterCard and Visa to ensure security and global accep-tance so that MasterCard and Visa Cards can continue to be used everywhere.EMV chip technology is becoming the global standard for credit card and debit card payments. Named after its original developers (Europay, MasterCard and Visa), this technology features payment instru-ments (cards, mobile phones, etc.) with embedded microprocessor chips that store and protect cardhold-er data.As per Central Bank (SBP) regulations for the payment card security, Implementation date of EMV Issu-ance was June 30th, 2018 and Mobilink Microfinance Bank Limited is the first Bank in the Microfinance Industry who start issuing EMV-VISA cards to their Wallet/Account holders well before the given dead-lines. Implementation of EMV technology and associated upgraded card infrastructure will ensure the enhanced security features for customer ATM transactions and also provide a cherish experience on multiple channels. The biggest benefit of EMV is the reduction in card-present card fraud resulting from counterfeit, lost and stolen cards, card data theft for skimming. EMV also provides interoperability with the global pay-ments infrastructure – consumers with EMV chip payment cards can use their card on any EMV-compat-ible payment terminal.Moreover, with EMV enabling us to provide extra security and protection to our customers, we have now launched two variants of these cards. We have improved existing features on Visa Classic and have launched a new card with the name Visa Classic Plus having double the limits on Cash withdrawal and Fund transfer from Visa Classic. By this we would be able to serve customer’s banking needs efficiently and it would increase the salability of our liability products.

with

Chip & Pin

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1 s t h a l f 2 0 1 8

Health insurance is type of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses during hospitalization. In view of un-affordability of the bor-rowers, Mobilink Microfinance Bank Limited (MMBL) has launched the health insurance ser-vices to protect the high unexpected cost of the borrowers in collaboration with TPL Life Insurance Company Limited in December 2017.MMBL is the only bank in banking industry of Pakistan who is offering this product Free of Cost for borrowers on all loan products, means premium cost against borrower’s health insur-ance is borne by the bank. Borrowers also have the option of buying health insurance prod-ucts for their dependents at a very nominal price. We are not only providing financial solu-tions but also are concerned about healthcare needs of our borrowers and their families.This health insurance product is launched by MMBL with the name “Sehat Yaqeen”. Key fea-tures of this product are:

1. In-patient Hospitalization limit is PKR 100,000/-2. Pre-existing chronic conditions are covered from day 1.3. MRI / CT scan / all other tests are covered during hospitalization.4. Ambulance charges of up to PKR 500/- are covered.5. In case patient lost his/her income during hospitalization, PKR 500/- per day will be paid to him/her.6. Over 200 renowned hospitals are onboard and providing their services as panel hospitals to MMBL customers across Pakistan.7. In case customer gets treatment from non-panel hospitals, he/she can claim for reim-bursement of his/her amount that is up to limit. Insurance company will reimburse 80% of claimed amount in this case.8. In case customer dies during hospitalization, insurance company will provide PKR 25,000/- as burial charges to his/her family.

Till June 30th, 2018 above 76,000 customers of MMBL are covered and quite a number of customers got treatment from paneled hospitals. Number of reimbursement cases are also facilitated by settling customer’s claims of treatment from non-paneled hospitals.This product not only serves and facilitates customers regarding their hospitalization needs but also provides competitive edge to MMBL over its competitors, because currently there is no single bank in banking industry of Pakistan that is offering such product to its borrowers free of cost.

Sehat Yaqeen(Health Insurance Product)

By Taimoor ul HassanRM Bancassurance

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ìCustomer service is an attitude not a department"

Going to the extra mileFew months ago, an elderly lady shared her story on social media. Her heartwarming story is about her bank. She has banked at several banks but she has been with this bank the last fifteen years. The bank manager is one that stands out and goes above and beyond his job title in Customer Service.

Her husband passed away four years ago who was maintaining account with the bank along with his accounts in other banks. After completing legal formalities, her husband’s account balance was transferred to her account. The bank manager knew her husband had passed away. He called her and expressed his condolences and asked was there anything he could do for her. She thanked him and told him no. He said if you ever need us for anything call me. She said ok and thought that was nice.

She got sick and did not go by the bank for couple of weeks. She got a call from him and he said Ms. Ahmed we haven’t seen you at the bank are you ok? She told him that she is just not feeling well. He said can we bring you something or do anything for you. She told him no but she thought how nice of this man to care about a Cus-tomer to check on her and offer to help her.

According to her, she would never think of changing banks. He shows how much he appreciates her business when she walks in the bank he comes out of his office and calls her by her name and welcomes her. That personal caring touch he gives makes him stand out in Customer Service.

The manager didn’t just do his job, he took it a notch further by making the service more personal, as a result his customer feels valued and appreciated.

When customers feel that way, they will trust the organization to have their best interests at heart, this leads to loyalty. The stronger the loyal customer base is, the less threat competitors pose.

What is “Going The Extra Mile”?

The term “going the extra mile” is a very old expression. It describes individuals who provide great customer service whether it's over the phone, in person or via email. This is a great concept for customer service and is further enhanced by the saying “There are no traffic jams along the extra mile”.

Going extra miles with customer’s 1. Know your customer. 2. Be Consistent. 3. Treating customers fairly4. Encourage the Voice of Customers5. Establish customer needs and wants.

Great interactions begin with knowing what customer requires. It is about going the extra mile to make customers happy or putting our own personal stamp on offered service that sets us apart from our competi-tion. Technology changes, but human nature is perpetual and in life and in business we enjoy seeing one person helping another. Truly remarkable customer service goes beyond fixing bug or handing out discounts. It’s about leaving people with a positive memory of business.Walking into a bank may seem like a serious and mundane activity. For most of us, we see a bank as a place for transactions. In addition, bankers are seen as very corporate, from the way they are dressed up, certain degree of seriousness. This is what the good banks do. But what the great banks do differently is simple – they go beyond this image and do everything with a smile.

By: Fahad HayatManager Customer Support & Services

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Goi

ng t

o th

e ex

tra

mile

In order to be a customer-centric Service Quality Department has given executive priority to customer experience by having following deliverables:

1. 2013-2016 reported count of complaints dealt via e-mail was 115 (excluding com-plaints received and resolved via call center). FY-2017; a total of 2026 successful correspon-dences were made by CMU directly (excluding complaints received and resolved via call center), thus providing customers with timely complaint resolution & responding to infos, queries, and service requests.‘Your most unhappy customers are your greatest source of learning.’ Bill Gates

2. Formulation of Complaint Handling SOP covering aspects likewise role of complaint management unit, modes of complaint & complaint handling mechanism i.e. Categorization, Analysis & Disclosure of Complaint Data.

3. Deployed Centralized Complaint Management System operational at Head office by CMU & Bank’s call center teams which helps in capturing, tracking, automatic escalation of unresolved complaints, managing complaint statuses, recording of actions performed by respective teams & producing/extracting relevant MIS.

4. Customer Experience (CX) Survey was conducted & thereupon submitted report to Management. Survey was performed to acquire a candid feedback from our customers by publishing it on official Website & circulated in Branches.

5. Departmental synergy – ensured that Inter Departmental SLA’s are formulated & implemented.

6. Submitted first yearly Conduct Assessment Framework Report to SBP after getting it approved from Board of Directors.

7. Conducted Mystery Shopping in order to evaluate ground realities, gaps identification in service deliverance & customer expectations. Thus enabling us to improve our products, services & procedures. Report submitted to management as well.

You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.

Over the past few years, the value of procurement has become progressively obvious. Recent research has shown that today more and more people recognize the efficiency of procurement. Actually, the procurement role is essential to any business that purchases anything. If a compa-ny purchases goods, services or any other items, then the better its procurement function works, the more money it can make. Procurement professionals handle the details of procuring these purchases at optimal prices. Establishing rational procurement policies and procedures enables companies to formulate their buying strategies to its long-term goals and objectives. Procurement managers identify what to buy, complete purchase orders, consider delivery times, receive products and services from suppliers, review and accept items and approve sup-plier payments.Procurement management works in four main working areas:• Whenever a company intends to purchase goods or services, it needs to consider whether it is cost-effective and absolutely necessary or not as not all goods and services needed to be pur-chased from outside• A list of potential suppliers who provide the best deal for the organization, is formulated. (A selection criterion is used to select best the provider).Maintaining a good relationship with suppliers is extremely essential as it helps the sustainabil-ity of both the buyer and seller. One of the most important functions of procurement is to improve cost savings. Procurement teams analyze the product across multiple suppliers scat-tered across vast geographies and identify the best option to balance the cost and quality as required. Procurement also increases an organization’s productivity by providing visibility into daily transactions, making it easier for buyers to get the items they need faster and in time. Sav-ings can also be achieved by reducing delivery errors and increasing quality of services.The Procurement Team at MMBL is passionate about being an integral and significant compo-nent of MMBL. This year the Procurement Team has played its share in raising the company’s revenue by fragmenting in with an average saving of over PKR 40 Million with respect to price reduction. Procurement exceeding PKR 240 million has been completed by the team from Jan 2018 till date.

Procurement at MMBLBy: Sara Ehsan

Associate Procurement

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Does your company suffer from a culture of “nice”?

A culture of “nice” exists when people do not openly disagree with one another. Employees politely bite

their tongues when they have a dissenting viewpoint. No one dares bring up a contentious topic during a

meeting. Everyone is hesitant to be seen as “confrontational.”

A culture of “nice” occurs when people have genuinely good intentions, but out of a desire to be liked and

to not “rock the boat,” they find it difficult to publicly argue with one another. People are not being fake

or superficial, they’re just being “nice.”Being nice is a positive human character trait. I’m not advocating

for anyone to be an asshole, to any degree! But when “nice” defines your company’s culture, it’s danger-

ous.A company culture of “nice” dilutes the truth of the current reality. You don’t hear bad news until it’s

really bad. You only recognize a problem once it’s festered and ballooned into something serious. Your

ideas for solutions are contained in an echo chamber. Your decisions become driven by groupthink. To

discern if your company has a culture of “nice,” here are four questions you can ask yourself as a leader…

What happens when someone messes up?

When someone makes a mistake, do other employees avoid telling you directly? Now I’m not suggesting

you encourage “tattle-telling” in a company, but the opposite is detrimental to a company. An unwilling-

ness to acknowledge each others’ mistakes contributes to a culture of “nice.”

How long does it take to let someone go?

How much time passes between the moment you’ve decided a current employee is not the right fit for

the company, and the moment you tell them? If it’s longer than a week and you find yourself stalling,

you’re guilty of creating a culture of “nice.”

Do people bring up failure?

When is the last time someone (other than you) brought up a marketing campaign that fell short, or a

product line that was pulled? If your employees focus only on what’s going well and are reluctant to be

critical, they could be engaging in a culture of “nice.”

Do people disagree with you in public?

When you ask for people’s opinion on an important issue, do you get passive head-nodding? Or even

complete radio silence? If so, people may not feel comfortable voicing their disagreement, and your com-

pany may have a culture of “nice.”

K i l l t h e c u l t u r e o f “ n i c e ”

This is how you create a positive work environment

Kill the culture of “nice”

Written by Claire Lew, CEO of KnowYourCompanyShared By: Usama Ibrahim

Assistant Manager Talent & Culture

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How do you kill a culture of “nice”?

Perhaps you answered a few of those questions I posed earlier in a way that made you think, “Hmmm, we

may have succumbed to a culture of ‘nice’…” No worries, you are not alone. Many companies end up real-

izing they inadvertently sacrifice honesty for the sake of avoiding contentious situations. Companies

that have killed their culture of “nice” slowly over time and cultivated an honest, forthcoming culture in

its place, do these four things well:

1. Communicate that honesty and kindness are not mutually exclusive.

One of my favourite nonfiction books of all time, Crucial Conversations, talks about how our reluctance

to tell people the truth comes from the fact that we see honesty and kindness as being mutually exclu-

sive. But, they’re not. It’s possible to be both kind and honest. Communicating this with your team is key.

For example, in a one-on-one with an employee you could directly say, “I see honesty and kindness as not

being mutually exclusive — so don’t worry about if you think you’re being nice or not… I know you are, if

you’re simply trying to be honest.”

2. Model the vulnerability you want to see.

A culture of “nice” often takes hold when the team sees the example set from the leadership team. When

managers share only their highlights and accomplishments and never admit where things go wrong...

their team will never admit where things go wrong either. If you don’t talk about when you come up short,

then the rest of your team surely won’t. Encourage your team to feel comfortable coming to you with

their mistakes and shortcomings by admitting your mistakes and shortcomings as a leader, first.

3. Seek out dissent… and respond gratefully and respectfully to it.

Companies that have killed a culture of “nice” seek out dissent as much as possible. They view conflict

not as something that needs to be quelled or immediately resolved — but as an opportunity to grow,

learn, and improve as a company. Leaders will ask, “What a devil’s advocate point-of-view to the idea I

posed?” or “How I might be wrong in this situation?” They actively challenge their own ideas in front of

others. And when an alternative perspective is provided, they listen, thank the other person, and consid-

er what they’ve learned from now hearing a contrasting viewpoint.

4. Don’t sugar-coat or exaggerate.

When things are going well or when things are going bad, leaders in companies where they’ve killed a

culture of “nice” tell it like it is. They try to relay the truth of a situation as objectively and honestly as

possible. They know if they inflate something to be more than it is, or skirt away from saying how poorly

something was messed up… it helps no one. Building the culture you want — one where people feel safe

to come to you with new ideas, tough situations, bad news etc. — takes time. It’s the by-product of doing

things consistently and regularly, day-in and day-out. So don’t expect that your entire team’s attitudes

and behaviours will change overnight. With time and diligence in doing some of the best practices I

described above, you’ll be able to kill the culture of “nice” in your company.

Risk & Information Security Management

What & Why of RiskRisk is a word that we hear a lot of times in our daily life and this has become a word of our daily routine; be it our personal lives or the work lives. Whenever this word is heard, we start panicking & thinking what could go wrong if there’s risk i.e. physical risk or financial risk. As per the survey it’s been found people always feared of losing something of value which leads us to defining the term of Risk. The term is defined in simple words as “possibility that the outcome of an action or event could bring up adverse impacts”. In the course of business to generate revenue, Banks assume Risks. The action or event in the Risk definition refers to the operational activities and related outcomes which may not result in achieving the desired or set organizational objectives set by the Board of Directors of the Bank. Hence, the Risk. The types of Risks vary from bank to bank depending on their activities and scope of Operations.Risk Taking is an integral part of the banking business; therefore, it is not surprising that banks have been practicing risk management since long - the industry could not have survived without it. The only real change over the period is the degree of sophistication now required to reflect the more complex and fast-paced environment lead by technological advancements.

Risk Management Evolution at Mobilink Microfinance Bank Limited With this understanding and a governance activity, Risk Management function was among the functions that were instituted while setting up and launch of Mobilink Microfinance Bank Limited (MMBL). Risk Management has performed vital role in development of Policies, Processes, Products and Systems of MMBL during the course of its launch and afterwards. With growth of the bank, all the departments grew in line with increasing business volumes to support the operational requirements. Eventually, MMBL reached the point where specialization was felt as a must have in all functions especially the Control Function domains. This requirement was also in line with the regulatory framework and good Corporate Governance that requires independence of Risk taking and managing functions i.e. independent Credits Administration, Risk Management & Compliance functions. Resultantly, where these 3 functions were once a single functional domain, these 3 domains emerged as 3 separate business support and control functions.

Risk Management – Current Scenario Risk Management function at MMBL, as it now exists, is primarily responsible for overseeing Enterprise Risk Management which encompasses following sub-domains:

By Muhammad Rizwan IkramChief Risk Officer

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• Credit Risk • Market Risk • Liquidity Risk • Operational Risk • Strategic Risk • Information Security Risk

During the 1st half 2018, Risk Management function has contributed in development and updating of Poli-cies, Procedures & MIS in Credits, Operations and Information Technology areas. Specifically, Risk & Infor-mation Security Management function has worked on improving the ERM reporting structure, implemen-tation of SBP Enterprise Technology Governance Framework in collaboration with IT, Information Security Risk Framework, Improved Security for Payment Gateway, Risk Appetite review & monitoring, Improve-ment is data reporting & accuracy, Developing models for Loss Expectancy as per IFRS and development of MIS for Enterprise Risk Management. Apart from improvisation and sophistication in the traditional Risk Management Functions, the function itself has transformed in banking industry over the past decade, largely in response to regulations that emerged from the global financial crisis, fines levied in its wake and the technological advancements. The pace of these developments is not stagnating yet and trends suggest that risk management will experience even more sweeping change in the coming years. With realization of the changing landscape and scenario along with MMBL vision to be the leading Digital Bank in Pakistan, Risk Management function is becoming strengthened to be up to the challenges posed by these transformations and support achieving the Vision of MMBL. The changes expected as a result of the changing landscape in risk function’s operating model illustrates that going forward, mostly banking operations will be linked with data and analytics. As per Mckinsey research, at present about 50 percent of the Risk function’s staff are dedicated to risk-related operational processes such as Credit Administration, while 15 percent work in analytics. McKinsey research suggests that by 2025, these numbers will be closer to 25 and 40 percent, respectively.With technological advances and advent of digital era, Risk landscape and focus will be more inclined towards managing the risks related to and emerging from Information Technology, Information & Cyber Security and use of the technologies to deliver banking services. Accordingly, Risk Management is focusing on building its capacity in the following fields to manage the risks: 1. Analytics2. Data Management3. Information Security4. Cybersecurity

Current Risks at MMBL While MMBL is strengthening its control environment at Enterprise level, there are Risks that have shown increasing trend during 1st half of 2018. Management of these risks require coherent planning and efforts to keep them within approved limits. Brief description of these items are given hereunder.

• Credit RiskCredit Risk, the risk of loan delinquency, has been increasing since the start of the year and has PAR 30 has grown almost 4 times during the 6 months. Although, restricted to a certain geographical area, impacts may affect other areas if not managed properly.

• Product Concentration RiskMMBL portfolio is concentrated mainly in the Agriculture sector with 96% + portfolio in Crop & Livestock loans. Any fluctuation in prices of the Agriculture Produce, climatic change or natural calamity could severely impact the portfolio quality as we have seen in the last 8 months. Additionally, the bullet nature of these loans causes portfolio quality evaluation after 1 year and NPL in these loans suspends income for the whole year besides the provision. Diversification in loan portfolio towards Enterprise lending is the suggested strategy to manage these exposures.

• Information & Cyber Security RiskInformation and its analysis to support decision making process has become the source of competitive advantage in organizations and therefore needs to be protected against misuse. Any breach of Information Security (IS) could lead to breach of Customers’ confidence in the Bank’s capability to handle their busi-ness, damage the reputation of the bank that leads to other forms of Risks. As per ISO 2700, Information is an asset that, like other important business assets, is essential to an organi-zation’s business and consequently needs to be suitably protected. Information can be stored in many forms, including: • digital form (e.g. data files stored on electronic or optical media like Computers/laptops, USB, CD/DVD), • material form (e.g. on paper), • unrepresented information in the form of knowledge of the employees.

Information may be transmitted by various means including: courier, electronic or verbal communication. Whatever form information takes, or the means by which the information is transmitted, it always needs appropriate protection.

Future EndeavorsBased on the emerging trends and transformation of the Risk Management function, it will be a core part of MMBL strategic planning, collaborate closely with businesses, and act as a center of excellence in analyt-ics and de-biased decision making. While Risks cannot be eliminated in full neither can Risk Management be prepared for each & every eventuality, but initiatives leading to following achievements could be imple-mented that will build the essential components of a well-performing risk function over the coming years:

• Maximum automation of processes with minimal manual interventions• Increased reliance on advanced analytical models to de-bias decisions• Close collaboration with businesses and other functions to provide a better customer experience, de-biased decisions, and enhanced regulatory preparedness• Strong advocacy of corporate values and principles, supported by a robust risk culture that is clearly defined, communicated, and reinforced throughout the bank• A talent pool with superior advanced-analytics capabilities

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Ethical Compliance

S p e a k u pThe corporate and ethical compliance department of the bank has been busy over the last few months in bringing to the employees a set of new policies and procedures, ensuring that the employ-ees are up to date with the latest ethical standards. The aim is to ensure that MMBL as part of VEON Group sets a standard of ethical dealing and transparency.

For each of all employees the following policies and procedures have been launched and are also available on HR HUB under Compliance Policies Section:

1. Code of Conduct2. Conflict of Interest Policy3. Anti-Bribery and Corruption Policy 4. Gift and Hospitality Policies and Procedures5. Social Investments and Charitable Contributions Policy6. Speak Up: Raising Concerns and Non-Retaliation Policy

Staff is expected to familiarize themselves with the new policies & procedures and also apply them in their day to day official routine.

Speak-up!

Against any violation of either Bank’s SOPs, Code of Ethics, Anti Bribery Policy or anything under the Bank’s and Veons’s “Speak Up: Raising Concerns and Non-Retaliation Policy”.

Concerns may be raised through any of several channels, at the choosing of the person making the report:

• Contact Local Compliance Team on: mmbl.compliance@mobilinkbank.com• Make direct reports to a line manager, another manager/ supervisor, HR and Legal Departments• Email option provided in the compliance tab of HR Hub. • You can raise questions or report concerns at http://veon.com/speakup and compliance@veon.com

VEON and the Bank maintains a confidential case management system and MMBL employees should feel comfortable in reporting concerns and possible misconduct.

MMBL will not tolerate reprisal, retaliation, or subsequent discrimination against any person who in good faith raises a concern or reports possible misconduct.

“Speak Up: Raising Concerns and Non-Retaliation Policy”, is available in the compliance policy section of HR Hub. You are advised to familiarize yourself with the policy.

By: Sardar AzamManager Compliance

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SUCCESS

STORY

Noor Muhammad belongs to a small village of Ranipur named as Gadeji and belongs to a poor

family. He has to run a family constituting five members. He used to work in his small furniture

shop in Ranipur without any machine, all his furniture work including manufacturing and finish-

ing was done by hands which resulted in manufacturing small quantity of furniture items and

less sales hence earned less revenue from his business. Then one of the representatives of

Mobilink Microfinance Bank during his marketing campaign visited his shop and keeping in

view Noor Muhammad’s hard work and reputation suggested him to get Karobar loan to devel-

op and enhance his business which could help him earn more money for his livelihood and

increase his sales. As previously he was not able to deploy any machine for manufacturing due

to lack of financial resources but now after getting loan of Rs. 50,000 and some amount man-

aged by his ownself , he purchased ‘RANDA MACHINE” which resulted manufacturing of more

furniture with good finishing. After deploying RANDA MACHINE his production increased

significantly with good quality furniture. As he has been producing good quality furniture and

also being able to manufacture more items his furniture demand increased in the town hence he

deployed two more employees to assist him and meet the desired quantity of production of

furniture items.

Now he is able to feed his whole family properly and provide proper education to his children.

SuccessStory of Noor Muhammad

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Travel Diaries

Some Glimpses of

BakuA z e r b a i j a nBy: Mazhar Mehmood Jatoi

Area Manager RYK

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Baku is the capital of Azerbaijan Republic, which was also

the capital of Shirvan during the reigns of Akhsitan I and

Khalilullah I, Baku khanate, Republican Azerbaijan SSR and

the administrative center of Russian Baku governorate.

Baku is that it is derived from the old Persian Bagavan,

which translates to "City of God". A folk etymology explains

the name Baku as derived from the Persian “Bādkube”

meaning “city where the wind blows" due to being windy

throughout the year in Baku. However, the word Bādkube

was invented only in the 16th or 17th century, whereas

Baku was founded at least before the 5th century AD.

Considering the beauty and historic importance of this city

we, a group of ten friends, decided to visit Baku as part of

our annual recreational trip. A summers is the best season to

visit this city we took a flight from Faisalabad to Dubai on

August 5, 2017 and a connecting flight from Dubai to Baku.

For those who want to travel the world and have some

budget constraints Fly Dubai is a good option. It enables you

to save money which you can spend on other activities on

your trip. Time spent at Dubai airport was a time to remem-

ber. As Dubai Airport is one of the busiest airports of the

world we enjoyed our stay there during transit time a lot. It

is a city in itself having duty free shops, eating outlets, two

open air garden areas, numerous business center, internet

and games facilities, prayer rooms, showers, spas, gym,

swimming pools, hotels and various lounge areas.

We landed at Baku late in night and went straight to hotel to

check in as all of us were tired due to long flight and transit

delays and hassle. We started to explore Baku on next day

and went to city center named fountain square which is one

of the famous places in Baku city. It is a public gathering

place especially after business hours and during the week

end. It is an attractive destination with many boutiques,

shops, hotels and passage.

The fountain square is a location where city authorities hold

many public shows, festivals and celebrations.

Famous Nizami street is also adjacent to the square which is

a waling street for tourists where you can enjoy Azerbaijani

cuisine. Various street restaurants offer wide range very

delicious food that have very nourishing and energizing

effect on you. You can just sit there in street enjoying your

food or sipping coffee while watching people walking by

with bright lights and music being played in background.

We visited the palace of Shirwanshahs which was built in

15th century by Shirwanshahs. This is included in UNISCO’s

list of world heritage and is protected and kept in its original

form. It is located in the inner city with a five minutes’ drive

from the maiden towers. Maiden towers are the 12th centu-

ry monument in the old city of Baku. The maiden towers

house a museum where you can see how Baku city evolved

over the period. These towers are the most attractive and

historical place in Baku. One of the new icons of Baku city

are flame towers. This is a skyscraper with lights designed in

way that in the night it looks like these towers are on fire.

These towers also are tallest building of the city.

A day was dedicated to the sea and the beaches. As Baku is

located on Caspian Sea, it has very beautiful beaches with

clear blue sea. The Caspian is the largest inland body of

water in the world and accounts for 40 to 44% of the total

lacustrine waters of the world. The coastlines of the Caspian

are shared by Azerbaijan, Iran, Kazakhstan, Russia, and

Turkmenistan.

Overall, Baku treats you with warmth and hospitality. You

can have touch of everything like beaches, historical places

and good weather with very welcoming attitude by the

locals. All in all a must visit place with low budgets.

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Laughter

Laughtermedicine

Time

is the best

Bill struggled to get up early in the morning and as a result was always late for work. His boss got fed up of his constant lateness and so threatened to fire him if he didn't get his act together.So Bill went to see his doctor who gave him a pill and told him to take it just before going to bed.Bill did this, and slept very well and actually beat the alarm clock by two hours. So he fixed himself a nice breakfast and drove happily to work, in plenty of time for the start of the work day.When he got there, he said, "Boss, that pill the doctor gave me actually worked!"His boss said, "That's all very well, but where were you yesterday?"

-A client comes to a bank:- My cheque was returned with a remark: "Insufficient funds". I'd like to know whether it refers to mine or the Bank?

Interview with a successful businessman:- Tell me, how many people work in your company?- Hmm... Approximately half.

Manager for his subordinate:- What are you doing here?- Executing your command.- But I haven't told you anything.- So and I do nothing.

- Why did you leave your last job?- Company relocated and didn't tell me where...

God created the world. All the rest things were produced by Chinese

A young businessman had just started his own firm. He rented a beautiful office and had it furnished with antiques. Sitting there, he saw a man come into the outer office. Wishing to appear the hot shot, the busi-nessman picked up the phone and started to pretend he had a big deal working. He threw huge figures around and made giant commitments. Finally he hung up and asked the visitor, "Can I help you?"The man said, "Yeah, I've come to activate your phone lines."

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