risk appetite gameification initiative · design an interactive experience for bank of nova scotia...

Adam Normand

BANK OF NOVA SCOTIA

RISK APPETITE GAMEIFICATION INITIATIVE

Project Proposal

July 2016

Risk Appetite Gameification Initiative 1/16

TABLE OF CONTENTS

Contents PROGRAM ...................................................................................................................... 2

Mandate ....................................................................................................................... 2 Problem ....................................................................................................................... 2 Assumptions ................................................................................................................ 2 Strategies .................................................................................................................... 2

PROJECT ....................................................................................................................... 3

Concept ....................................................................................................................... 3 Goals ........................................................................................................................... 3

Project Ideas ................................................................................................................ 3 Objectives .................................................................................................................... 3

PROPOSAL .................................................................................................................... 4

Concept ....................................................................................................................... 4

Supplier ....................................................................................................................... 4 Overview .................................................................................................................. 4

Customers ................................................................................................................ 4 Other Benefits of the Quiz Works Service ................................................................ 4

Format ......................................................................................................................... 5

Content ........................................................................................................................ 5 Types of Questions .................................................................................................. 5

Risk Topics to Cover ................................................................................................ 6 Example Question .................................................................................................... 6

Access to Platform ................................................................................................... 6 Architecture and Pricing Scenarios .............................................................................. 7

Feature Module Packages ....................................................................................... 7 Modules Defined ...................................................................................................... 7 Comparative Scenario Pricing .................................................................................. 8

Scenarios Defined .................................................................................................... 8 Conditions and Payment ............................................................................................ 10

APPENDIX A: Proof of Concept ................................................................................. 11

Live Online Demo ...................................................................................................... 11 Screen Captures ........................................................................................................ 11

Countdown Timer ................................................................................................... 11 Typical Quiz Screen ............................................................................................... 11 Rankings ................................................................................................................ 12

Demo Questions ........................................................................................................ 12 APPENDIX B: Initial Contract Proposal from Supplier ................................................ 16


PROGRAM

Mandate

Raise awareness and engage all Scotiabank employees about the Bank’s risk culture and global risk appetite through a multi-pronged internal communications campaign.

Problem

Recent world events clearly show that having a communicated risk appetite built into organizational activities could have preserved a considerable amount of capital. For example, a major problem that led to the current financial crisis was that although objectives had been created, there was no articulation of risk appetite or identification of those responsible when risks were incurred. Had financial institutions clearly communicated a risk appetite for unsecured mortgage-backed financial instruments, their management and boards would have likely asked questions such as: what if housing failures differ from the historical model? What if mortgages fail systematically and are highly correlated to an area we are investing in?

Assumptions

Risk appetite is most advantageously communicated according to categories of risk, as management can exercise judgment about acceptable levels given the unique considerations of each group of risks.

Allowing greater judgment, this approach reduces the perception that risk management is overly prescriptive.

Management should not assume that responsible individuals will implement risk management within the appropriate risk appetite.

Strategies

Applications may include:

Newsletters, town halls, Scotiabank Live;

Survey or tracking surveys;

Interactive training modules mandatory for all Bank employees annually or biennially;

Graphics for distribution including bank’s rewards and risks;

Tracking and publishing of risk and reward graphic with quarterly performance financials complemented by risk appetite KPI;

Risk should be mapped into the same metrics the organization uses to measure success.


PROJECT

Concept

Design an interactive experience for Bank of Nova Scotia employees to learn risk appetite in the theme of a digital game or competitive setting.

Goals

Fun and engaging – we want to drive word of mouth amongst employees;

Drive the competitive spirit in each Scotiabanker to encourage participation;

Use analytics to measure participation and risk appetite concepts that are not fully understood.

Project Ideas

Each type of risk appetite identified by world.

Some risks result in immediate death.

Emphasis of risk-reward for some risk.

Game should be spread out into several parts over a period of time. This is basic psychology.

Earnings baseball is a really good idea.

Objectives

Reach all employees - consistent implementation across bank;

Raise awareness of impact of daily decisions;

Communicate understanding of role and responsibility;

Provide information on processes for understanding, reporting, complying to risk appetite;

Effective monitoring and communication of risk and risk changes;

Consistent understanding of risk appetite and related tolerances for each organizational unit; and

Consistency between risk appetite, objectives and relevant reward systems.


PROPOSAL

Concept

Development of two multiple-choice quizzes on the QuizWorks platform, which takes on the branding of the Bank and is delivered according to a time-release schedule. Quiz will thematically be competitive and fun, using simple language and a points-based time-driven quiz with visual indicators of performance, updated live to enhance competitive experience. Employee performance stored by user, but published to leaderboard by team group. The quizzes will be delivered at different times during the campaign – the cumulative scores of both quizzes will win prizes. Different employee teams will be invited to participate in blocks, whereas the communication will be released to each team according to a time-release schedule – to ensure that system resources are not overloaded.

Supplier

Overview

Quiz Works is an online multiple choice quiz developing service. It provides users the tools to easily develop quizzes on their own. https://www.onlinequizcreator.com/

Customers

Primary Target Market: Teachers, Businesses and Educators

Known Happy Customers: Unilever, Shell and Universities

Banking Case Study: Engagements with a few large banks

Other Benefits of the Quiz Works Service

Easy to use quiz building tools and full technical support if we pay for the Corporate Package;

Ability to brand the quiz with Scotiabank or Risk Appetite items;

Capability to export rankings and statistics, which will also track our Risk Appetite reach;

https://www.onlinequizcreator.com/


Published company-wide score board showing group/individual performance to entice users to engage competitively;

Easily accessible from smartphones, computers and tablets via internet browser;

Quizzes each have own question libraries; and

Each user may have a different set of questions at random.

Format

Two separate quizzes released during the campaign;

Each quiz consists of 8 questions (worth 8 points) and a case study (worth 3-5 points) at the end;

The quizzes starts with big flashing green numbers which are counting down indicating that the quiz is about to start. In the beginning a graphic demonstrates how your “time bar” is filled up – See Appendix 1 for graphics;

As the user plays its “time bar” reduces – it goes from green (lots of time), to yellow (less time) to red (almost out of time) – See Appendix 1 for graphics;

If the user answers a question correctly, the time bar is increased by 10 seconds. If the user answers incorrectly, the time bar is decreased by 10 seconds;

It is essential for the user to keep answering the questions correctly because the case study at the end requires quick reading and quick thinking in order to bank the full 3-5 points;

If the participant answers a question correctly, they will be allocated a certain number of points: o Harder questions can be worth more points than others; and o Answering a question that is somewhat right can earn you some points, but not full

points;

The game will consists of the following types of questions: o True or false; o Multiple choice; o Pick multiple answers; o Pick the most likely; and

Utilize pictures where we can – add fun elements; and

Once the quiz finishes the user will receive their score, and see where they ranked amongst all other players – See Appendix 1 for graphics.

Content

Types of Questions

Questions must be strategically designed to not require too much academic knowledge, or seem inherently boring, as this would likely lead to loss of interest in the quiz. Language then, is key. For example, would tellers understand what a liquidity coverage ratio or 30-day survival horizon are? Most questions should be scenario-based and focused on the following: reputation risk, operational risk, the guidelines for business conduct and our values.


Risk Topics to Cover

Risk Appetite, Types and Background

Reputational – bank has very low appetite

Credit – Outlined for different businesses by internal documents. Includes other dimensions of risk. Communicated quarterly and approved by the board.

Market - same

Liquidity - same

Breaches of Guidelines for Business Conduct – no tolerance

Strategic

Reporting

Compliance

Operations Objectives

Key Messages

It is employee responsibility to manage each risk that you have the potential to create; and

Risk appetite is about knowing risk boundaries. Know the bank’s boundaries.

Example Question

The Mexico subsidiary is looking to loan money to the following borrowers, which one would most likely be approved?

An Oil and Gas company that incurred a major oil spill last year on one of its properties.

A Hotel Developer that is known for cutting down the rainforest to develop – the press has been reporting on the Hotel’s social responsibility.

An agriculture company that has pledged to abide by the equator principles. Sub question: What are the two main types of risk the Bank should consider before making its decision?

Credit

Environmental

Liquidity

Reputation

Access to Platform

The method by which employees access the platform will be determined by the architecture scenario that is chosen by Risk Management and furthermore passes corporate requirements relative to Security and Privacy. The core intent is to leverage the Scotiabank Live environment, granted it passes security.


Architecture and Pricing Scenarios

The application must be distributed to employees, however alternate methods are available through the supplier. The first method is not recommended, but others are possible. Scenarios B or C are the top recommended options for presentation to security addressing common IT concerns for Scotiabank. The scenarios differ in architecture combinations of user identification and requirements to access it.

Feature Module Packages

Module Price Scen

ario

A

Scen

ario

B

Scen

ario

C

Scen

ario

D

Team Module 2,000 X X X X

Combined Leaderboard 2,000 X X X X

Customization: teams and combined leaderboard integration 4,000 X X X X

Server space for peak-demand (in-month) 500/mo. X X X X

Corporate Owl License (monthly) 100/mo. X X X X

SSO configuration and development 8,000 X

SBL internal development costs - tables 2,000 X X X

SBL internal development costs – page and iframe 1,000 X X

iFrame authentication table and lookup development costs 2,000 X

*Combination of provided quotes and estimated values.

Modules Defined

Team Module

The team module allows people to create or join a team. Next to the individual ranking is a team ranking, which will be the average score of the players (so a team of 2 people can compete with a team of 4 people). It’s possible for the admin to create pre-defined teams or to let users create teams themselves.

Combined Leaderboard

People from several countries may compete against one other in their native language, on the same quiz, using a “combined leaderboard”. All the players of each language are then added to the leaderboard to distinguish which country each are from.

Customization: Teams and Combined Leaderboard Integration

Requirement to adapt the team module and combined leaderboard for integration, because it will be quite complex to combine teams and players from several quizzes and form 3 single leaderboards (individual, team and within team).


Corporate Owl License

Includes:

Maintenance of custom work;

Up to 50.000 test takers a month;

Unlimited exams, quizzes and assessments;

Back-end for managing quizzes and tests;

Statistics reporting these will include: o How many users started the quiz; o How many users completed the quiz; o How many users shared their results; o Statistics on question level; o Statistics on category level; o Statistics on individual user session;

Exports statistics (.csv format);

Responsive design for mobile phones and tablets;

1 gigabyte of data storage (enough for 5500 images);

Hosting (shared server); and

Bug support during office hours (CET time zone).

Comparative Scenario Pricing

Initial Monthly # Months Total

Scenario A 8,000 600 2 9,200

Scenario B 11,000 600 2 12,200

Scenario C 14,000 600 2 15,200

Scenario D 16,000 600 2 17,200

*Combination of provided quotes and estimated values.

Scenarios Defined

Scenario A: Invite Only

Due to the high numbers of participants this option isn't possible with supplier’s server capacity.

Invite only uses e-mail to distribute message to each employee with custom link to the platform, whereas the custom link is used to identify the user/team on the platform.

This method requires providing the supplier with the vast list of employee e-mails and team names, which is internal information that is preferable not to share with an external party.

Scenario B: Scotiabank Intranet (Method 1)

Quiz would reside inside of an iFrame within a ScotiabankLive (SBL) page created specifically for this initiative – can be housed under the “Risk Management” group or be entirely independent.


Scotiabank employees must authenticate to SBL, prior to loading the page – same experience as usual with SBL.

Quiz participants would be greeted with a splash page within the iFrame requesting the user to input:

o Name o E-mail address o Team/Group o Country

The supplier would then capture employee information input into their systems.

Scenario C: Scotiabank Intranet (Method 2)

Quiz would reside inside of an iFrame within a ScotiabankLive (SBL) page created specifically for this initiative – can be housed under the “Risk Management” group or be entirely independent.

Scotiabank employees must authenticate to SBL, prior to loading the page – same experience as usual with SBL.

All quiz participant invitees will be stored in a database, internal to BNS, containing five pieces of information:

o Name o E-mail address o Team/Group o Country o Unique random 8-digit number

Depending on security requirements, the supplier will have the same table, but may have information limited to at least:

o Team/Group o Country o Unique random 8-digit number

Scotiabank developers from the SBL development team must create a custom script that will identify the authenticated user with an 8-digit unique random number, to be stored in the aforementioned table; this number will be appended to the URL that will load in the iFrame.

This will be processed using the POST/GET method in HTML, whereas the supplier will then authenticate a user based on the code, not their e-mail address, maintaining that information internal to BNS.

The user will be auto-authenticated, and is then required to only launch the quiz, rather than enter information manually.

Scenario D: Single-Sign-On (SSO)

Verification SSO system.

Extra customization (+5 days of development at cost, rate to be determined)

Depending on the SSO chosen very secure, would require BNS security to have conversation with QuizWorks development team.

Employees would access the quiz though either SBL, via an iFrame, or directly to the online platform in their browser window.

The user will be auto-authenticated, and is then required to only launch the quiz, rather than enter information manually.


The supplier’s page would run a connection with BNS LDAP to authenticate users on an ad-hoc basis using a secure connection, as developed in the customization.

Conditions and Payment

50% of the costs will be paid at the signing of the contract and 50% after delivery of the work.

Support will be during CET business hours.

We will productize the feature, so the maintenance in the future will be for our costs, we will guarantee that we'll keep the feature online for a minimum of 2 years.

The assessment will work in all modern versions of all major browsers. Internet Explorer 10 and below will not be supported (please check what browser version your company uses).


APPENDIX A: Proof of Concept

Live Online Demo

https://www.onlinequizcreator.com/scotia-poc-v2/quiz-193968

Screen Captures

Countdown Timer

Typical Quiz Screen

https://www.onlinequizcreator.com/scotia-poc-v2/quiz-193968


Rankings

Rankings will be published to increase competition. Option to award the top three winners with the highest score.

Demo Questions

Correct answers are highlighted green.

For which of these categories does Scotiabank have no risk appetite?

a) Credit Risk

b) Breaches of the Guidelines for Business Conduct

c) Liquidity Risk

d) Market Risk

Reputational risk is something for which the bank has…

a) Some appetite

b) High appetite

c) Very low appetite

Which of these is not one of the Bank’s core values?

a) Culinary excellence

b) Integrity


c) Respect

d) Accountability

e) Passion

Who is responsible for risk in Scotiabank?

a) Global Risk Management

b) Nobody

c) Canadian employees

d) Customers

e) Every employee

Which of these is one of Scotiabank’s Core Deliverables?

a) Maintain appropriate financial strength and liquidity

b) Ignore customers which are not very profitable to us

c) Cause financial instability in the countries in which we are present

You are frustrated by or disagree with Scotiabank’s approach, broadly or on a specific issue. Which of these is the best approach to articulating your opinions?

a) Post your feelings on social media

b) Speak to the media

c) Constructively discuss the problem with your colleagues or superiors

d) Post on Scotia Live


a) Bankrupt our competitors

b) Ensure a deep, diverse and engaged pool of talented Scotiabankers

c) Avoid involvement with the health of the communities in which we operate


a) Bankrupt out competitors

b) Avoid cultural asymmetry within the organization

c) Operate in an efficient, secure and compliant manner

Complete this sentence: The Bank favours businesses that generate…

a) …internal competition, risky investments, and extravagant expenditure.

b) …sustainable, consistent and predictable earnings.

c) …short-term, unsustainable and noncompliant income.

You believe a client is engaging in activity through their Scotiabank relationship that is either illegal, or does not align with the Bank’s standards. Whom should you refer your suspicions to?


a) Nobody, it isn’t your problem

b) Your superiors

c) Scotiabank Global Compliance

d) b and c

You have observed a breach of the Guidelines for Business Conduct. To whom can you report this breach anonymously?

a) Scotiabank Global Compliance

b) The Office of the President

c) Staff Ombudsman Office

d) Chief Auditor

e) Navex Global

f) All of the above

g) a through d

As an employee of Scotiabank, you are responsible for ensuring that you:

a) Review the Guidelines of Business Conduct on, at minimum, an annual basis

b) Ask questions if you are unclear about your responsibilities or the appropriateness of a

particular action or behavior

c) Comply with the Guidelines

d) Report any actual or potential breach of the Guidelines

e) All of the above

Which of these is not one of Scotiabank’s six guiding principles?

a) Follow the law wherever Scotiabank does business

b) Avoid circumventing the law as much as possible

c) Conduct yourself honestly and with integrity

d) Honour our commitments to the communities in which we operate


a) Follow the law wherever Scotiabank does business

b) Greed is good




a) Treat everyone fairly, equitably and professionally, whether they are customers,

suppliers or service providers, employees, or others who deal with us.

b) Money never sleeps




What is a “conflict of interest?”

a) When two people are not in agreement

b) When someone finds something uninteresting

c) When there is a conflict between what is in your personal interests, and those of

Scotiabank or a customer.

Which of these situations is a conflict of interest?

a) A vulnerable customer names an employee as a beneficiary of his or her will

b) An employee accepts an expensive or exclusive gift from a client

c) An employee accepts a gift from a supplier or service provider who is bidding on a

contract to supply services to Scotiabank

d) All of the above

You become familiar with insider information that could influence Scotiabank’s share price. What should you do?

a) Recuse yourself from trading Scotiabank shares until a time at which the information is

public.

b) Use the information to inform your trading activity.

c) Notify your superiors or a relevant compliance officer, and recuse yourself from trading

Scotiabank shares until a time at which the information is public.

d) Pretend you didn’t see or hear the information.


APPENDIX B: Initial Contract Proposal from Supplier

Scotia Bank.pdf

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