Stress Testing for Banks

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Duration 2 days – 14 hrs

 

Overview

 

The Stress Testing for Banks Training Course is designed to provide banking professionals in the Philippines with essential skills to develop, implement, and interpret stress tests for assessing a bank’s resilience in adverse economic scenarios. This course covers the entire process of stress testing, including scenario development, selection, and execution, as well as advanced methodologies like reverse stress testing. Participants will learn about regulatory expectations for stress testing and how to integrate stress testing results into broader risk management frameworks to enhance a bank’s preparedness for financial shocks.

 

Objectives

 

  • Develop skills in designing stress test scenarios relevant to banking risks.
  • Apply various stress testing methodologies to evaluate capital and liquidity resilience.
  • Conduct reverse stress testing to identify critical failure points.
  • Understand regulatory stress testing frameworks and compliance requirements.
  • Integrate stress testing outcomes into comprehensive risk management practices.

 

Audience

 

  • Risk Managers and Analysts
  • Compliance Officers and Regulatory Affairs Professionals
  • Financial Controllers and Treasurers in Banking
  • Banking Executives in Risk Management and Strategic Planning
  • Internal Auditors focusing on capital adequacy and liquidity assessments

 

Pre- requisites 

  • Basic understanding of risk management in banking.
  • Familiarity with capital and liquidity management principles is beneficial.

 

Course Content

 

Introduction to Stress Testing for Banks

 

  • Overview of stress testing and its importance in the banking sector
  • Types of stress tests: sensitivity analysis, scenario analysis, and reverse stress testing
  • Key objectives and benefits of stress testing for banks

 

Scenario Development and Selection

 

  • Identifying relevant stress test scenarios: economic downturns, market disruptions, and operational risks
  • Criteria for selecting and developing scenarios
  • Adapting scenarios to reflect local and global economic conditions
  • Workshop: Designing custom stress scenarios for capital and liquidity risk

 

Stress Testing Methodologies

 

  • Overview of quantitative and qualitative stress testing approaches
  • Calculating impact on capital, liquidity, and profitability
  • Applying multi-variable analysis to simulate complex scenarios
  • Case study: Comparing stress testing methodologies in Philippine and global banks

 

Reverse Stress Testing

 

  • Introduction to reverse stress testing and its role in risk management
  • Identifying scenarios leading to failure or insolvency
  • Designing reverse stress tests to identify critical risk thresholds
  • Practical exercise: Developing a reverse stress test for potential crisis scenarios

 

Regulatory Stress Testing Frameworks

 

  • Overview of regulatory stress testing requirements (e.g., BSP, BCBS)
  • Key components of regulatory stress tests and capital planning expectations
  • Understanding regulatory metrics and documentation standards
  • Case studies on regulatory stress test outcomes and compliance

Integrating Stress Tests into Risk Management

 

  • Incorporating stress testing results into risk management frameworks
  • Aligning stress test outcomes with capital and liquidity planning
  • Using stress testing to inform strategic decision-making and contingency planning
  • Workshop: Integrating stress test results into a bank’s risk management strategy

 

Interpreting and Reporting Stress Test Results

 

  • Analyzing stress test results and identifying risk exposures
  • Communicating stress test findings to stakeholders and regulatory bodies
  • Best practices for documenting and reporting stress test outcomes
  • Practical exercise: Interpreting stress test results and drafting a report for senior management

 

Future Trends and Emerging Challenges in Stress Testing

 

  • Adapting to evolving regulatory requirements and best practices
  • Impact of digital transformation and new risk factors on stress testing
  • Emerging tools and technologies for advanced stress testing

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Warehouse Operations and Inventory Management Training Course     Duration 2 Days – 14 hrs.   Overview   This course provides a practical understanding of warehouse operations and inventory management for personnel who supervise, review, or audit warehouse processes. It covers the movement of goods from receiving through dispatch, with emphasis on warehouse layout, storage systems, picking strategies, stock rotation, inventory accuracy, and operational controls.   Participants will learn to identify process weaknesses, investigate stock discrepancies, reduce shrinkage, and interpret warehouse productivity indicators. The course connects day-to-day warehouse activities with the records, controls, and performance measures needed for effective supervision and auditing.   Objectives  

  • Explain warehouse processes and their impact on inventory accuracy and service performance.
  • Evaluate warehouse layouts, storage systems, and product locations.
  • Identify appropriate controls for receiving, put-away, storage, picking, and dispatch.
  • Apply First-In, First-Out (FIFO) and First-Expired, First-Out (FEFO) principles.
  • Compare picking strategies based on order characteristics and operational requirements.
  • Identify causes of inventory discrepancies and recommend corrective actions.
  • Develop a cycle counting approach based on inventory value, movement, and risk.
  • Recognize sources of shrinkage and recommend preventive and detective controls.
  • Interpret warehouse productivity and inventory performance KPIs.
  • Review warehouse processes using supporting records, observations, and control evidence.
        Target Audience  
  • Warehouse supervisors, team leaders, and managers.
  • Inventory controllers and stock control personnel.
  • Logistics and distribution supervisors.
  • Internal auditors and operational compliance personnel.
  • Supply chain and operations professionals.
  • Personnel responsible for reviewing warehouse controls and performance.
  Prerequisites  
  • Basic familiarity with warehouse, logistics, or inventory activities.
  • General understanding of business processes and operational documentation.
  • Basic numerical skills, including percentages and simple calculations.
  • Basic spreadsheet skills are helpful.
  • No prior experience with a specific Warehouse Management System (WMS) is required.
   

Course Outline

  Day 1: Warehouse Processes, Layout, and Storage Controls Module 1: Warehouse Operations and Process Controls  
  • Warehouse roles within the supply chain.
  • End-to-end flow: receiving, put-away, storage, replenishment, picking, packing, and dispatch.
  • Physical stock movement and corresponding system transactions.
  • Responsibilities, authorization, and segregation of duties.
  • Common operational weaknesses and audit evidence.
  Module 2: Warehouse Layout and Storage Systems  
  • Functional zones, movement paths, and space utilization.
  • Receiving, storage, picking, staging, and dispatch areas.
  • Storage options: floor stacking, shelving, pallet racking, and bin storage.
  • Fixed and dynamic location systems.
  • Product slotting based on movement, size, handling needs, and compatibility.
  • Layout bottlenecks and their effects on productivity and inventory control.
  Module 3: Receiving and Put-Away  
  • Purchase orders, delivery documents, and expected receipts.
  • Quantity, condition, and item identification checks.
  • Recording shortages, overages, damage, and discrepancies.
  • Controls for acceptance, quarantine, and release.
  • Put-away rules and location confirmation.
  • Traceability through labels, barcodes, lot numbers, and serial numbers.
  • Timely recording of receipts and stock movements.
  Module 4: Storage, Stock Rotation, and Replenishment  
  • Storage discipline and location integrity.
  • FIFO and FEFO principles, applications, and limitations.
  • Batch, lot, and expiry-date management.
  • Controls for slow-moving, obsolete, damaged, and expired stock.
  • Replenishment of picking locations.
  • Supervision and review of stock rotation compliance.
    Day 2: Order Fulfillment and Inventory Accuracy Module 5: Picking Strategies and Order Fulfillment  
  • Discrete, batch, zone, and wave picking.
  • Selecting picking strategies for different order profiles.
  • Pick paths, location sequencing, and travel reduction.
  • Replenishment coordination and stock availability.
  • Picking verification and error prevention.
  • Packing, staging, and dispatch confirmation.
  • Handling short picks, substitutions, cancellations, and returns.
  Module 6: Inventory Records and Accuracy Controls  
  • Item master data, units of measure, and location records.
  • On-hand, available, allocated, and quarantined stock.
  • Transaction controls for receipts, transfers, issues, returns, and adjustments.
  • Common causes of physical and system stock mismatches.
  • Barcode scanning and WMS control points.
  • Inventory reconciliation and supporting documentation.
  • Measuring inventory accuracy and interpreting discrepancies.
  Module 7: Cycle Counting and Physical Inventory  
  • Cycle counting versus full physical inventory.
  • ABC classification and risk-based count priorities.
  • Count frequency based on value, movement, and discrepancy history.
  • Count preparation, blind counting, and movement controls.
  • Recounts, variance investigation, and adjustment approval.
  • Root cause analysis and corrective action follow-up.
  • Reviewing the effectiveness of the counting program.
  Module 8: Shrinkage Reduction and Inventory Protection  
  • Sources of shrinkage: loss, damage, theft, misplacement, and recording errors.
  • Access controls and accountability for stock movements.
  • Controls for high-value and sensitive inventory.
  • Returns, write-offs, scrap, and disposal controls.
  • Exception reporting and unusual transaction patterns.
  • Investigating recurring losses and unexplained adjustments.
  • Preventive and detective controls for shrinkage reduction.
    Day 3: Performance Management, Process Review, and Improvement Module 9: Warehouse Productivity and Inventory KPIs  
  • Receiving productivity and dock-to-stock time.
  • Put-away productivity and replenishment performance.
  • Picking productivity and order accuracy.
  • Inventory accuracy and cycle count variance.
  • Space utilization and storage capacity.
  • Shrinkage, damage, and expiry indicators.
  • Defining KPI formulas, data sources, and reporting boundaries.
  • Interpreting trends while balancing speed, accuracy, and service.
      Module 10: Supervising and Auditing Warehouse Processes  
  • Process mapping and identification of critical control points.
  • Reviewing procedures against actual warehouse practices.
  • Tracing transactions from documents to systems and physical stock.
  • Reviewing approvals, access rights, and segregation of duties.
  • Identifying control gaps and recurring process exceptions.
  • Documenting findings with clear supporting evidence.
  • Prioritizing corrective actions and tracking closure.
  Module 11: Warehouse Improvement Planning  
  • Identifying bottlenecks, unnecessary movement, and rework.
  • Improving layout, slotting, and picking arrangements.
  • Addressing inventory discrepancy root causes.
  • Standardizing transaction recording and exception handling.
  • Assigning improvement owners and measurable targets.
  • Monitoring results and sustaining operational improvements.
  Module 12: Capstone — Warehouse Operations and Inventory Improvement Plan  
  • Review a warehouse scenario containing layout, transaction, inventory, and performance information.
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  • Recommend appropriate FIFO or FEFO controls.
  • Develop a cycle counting and inventory reconciliation plan.
  • Propose controls to reduce shrinkage and improve traceability.
  • Select relevant KPIs and define their calculation and reporting requirements.
  • Produce a prioritized improvement plan with responsibilities and expected outcomes.
 

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