This is something we should all be doing when we first settle down at our desks in the morning. It’s something that needs to happen before we’ve brewed our first pot of coffee or eaten our cornflakes. No matter how unpleasant or uncomfortable the sensation, we should all be eating the frog.
For those of you scratching your heads and wondering what I am talking about, eating the frog is a business management expression for tackling the nasty tasks first and getting them out of the way. The saying goes "If the first thing you do each morning is to eat a live frog, you can go through the day with the satisfaction of knowing that that is probably the worst thing that is going to happen to you all day long!". The theory goes on; (and see if you can spot the critical biological flaw here) failure to eat the frog allows it to feed on the pressure to get the task done and it will ultimately grow into a crocodile with an insatiable hunger to gorge on those who have not tackled the problem. Still with me on the analogy? To put it another way, do the thing you least want to do first or it will become a bigger, even insurmountable problem in the future.
The 2008 financial crisis caused governments to panic and, with the future of many major economies at stake, they threw money and legislation at banks to prop them up and compensate for recklessness on the trading floor. In the US, the Dodd Frank act - a hefty chunk of legislation - was introduced to prevent a repeat of the careless circumstances leading up to the financial meltdown of the late noughties. Banks are understandably stalling on implementing compliance measures but this has only served to prevent progress.
Legislation such as Dodd Frank is never easy to implement, especially in big organisations where the wheels of bureaucracy move more slowly. Some would even argue that legislation such as these are also a little too harsh on banks - one example being a requirement to produce full trade histories within 24 hours. This is something that would prove to be an arduous task for even the most wealthy and resource-rich financial organisations. Despite this, these changes are inevitable and a necessary requirement for all. Why? Because the government said so.
The time is now for banks to grit their teeth; and eat their frog.
Excuses are running thin for the banks as technology now exists to make the transition for banks into fully compliant organisations painless.
As reticent as banks are to adapt, the sooner they do the leaner they will be. Take my earlier example of reconstructing trade histories. If a claim is made for, say as an example, insider trading, the bank will have to dedicate weeks of manpower to manually run through days of recorded phone calls. It will be no good bringing in temporary staff to tackle the problem as trade floor language is complex to even the most eminent linguist. Bank staff will have to be taken off the shop floor to listen to weeks and potentially months of audio. This can of course, be a tiring process and tired human beings become careless, which can lead to mistakes that ultimately waste yet more time, more money and more resources. And after all that, consider this – what if the original claim turns out to be false?
By eating the frog and accepting the inevitable changes, banks open themselves up to a brighter future – one in which people can trust and one which in the long run, will save time, money and effort and ultimately allow banks to do what they do best.
By Simon Richards, CEO at Fonetic USA