RIYADH, 29 June 2004 — The Kingdom’s leading banks came together in a conference here to evaluate their readiness for new global risk management standards.

The meeting was vital given the fierce competition the proposed entry of at least four foreign banks in the Kingdom will bring, according to Rashid Al-Mugait, the chairman of Wamad Information Technology Services Co.

Wamad, a consulting company and solution provider to the banking industry in the Middle East and Africa, was the organizer of the event.

Al-Mugait said the new global risk management standards, known as BASEL II, are issued by the Bank of International Settlements through its risk management arm, the BASEL Committee.

During the conference, Ghassan Qudah, an IT expert, urged Saudi banks to “take the issue of BASEL II compliance seriously by putting in place strategies and systems for mitigating operational, credit and market risk.”

The banks on their part urged the Saudi Arabian Monetary Agency (SAMA) to speed up issuing Saudi-specific guidelines on the implementation of BASEL II. They said BASEL II compliance will see a substantial investment in new systems and procedures for consolidated risk management and expressed their willingness to kick off compliance projects once SAMA issued the guidelines. The use of biometric encryption to mitigate risks associated with electronic transactions was also discussed at the conference.

Moses Kuria, who has undertaken many business process re-engineering projects for banks in the Middle East, and Luqman Ahmed, vice president of Veridicom Inc, tackled the issue of business process excellence and its relation to operational risk. The experts also urged banks to take immediate measures to optimize and re-engineer their business processes, not only to comply with BASEL II requirements but also to face the challenges of competition as a result of new and more efficient foreign banks entering the Kingdom.

“BASEL II is not just a compliance tick-box. It offers banks a rare opportunity to re-engineer their business processes whilst obtaining a single customer view of credit risk across all asset classes, which ultimately leads to efficiency and better credit quality,” said Kuria, the head managing consultant at Wamad. “It has more to do with business transformation than with regulatory compliance,” he added.