WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 13, 2016
An Innovative Approach to Strategic Risk Management in Banking: Russian Banks Case Study
Authors: ,
Abstract: The paper presents new approaches to risk management in banking on the example of Russia. The relevance of the topic is related to the necessity of forming a unified risk based approach to the activities of all companies, including the financial sector. At the present stage of development, Russian banking system has faced a wider range of risks, which includes increased risk of systemic banking crisis, lack of financing, the volatility of the external environment, fierce competition in the market of banking services and many others. The situation forces lenders to rethink principles of risk oriented management and the implementation of innovative risk management tools. Despite the fact that wide range of tools of analysis and management of risk is used in banking, modern business environment requires changes in risk management methodology as well as a review of the principles of risk management. First of all, in the current situation the integrated approach to risk management is becoming increasingly important. On the one hand, such approach implies the assessment of risk on an integrated basis taking into account all types of risks, which affect the activities of a credit organization. On the other hand, in the present situation there is upgrading in the level of risk management. Along with operational level, issues of risk management are starting to be considered at the strategic level. These issues become the basis for strategic decision-making and business development. The situation is largely related to corporate governance, as well as the awareness of the risks not only as threats, but as also opportunities for business. In addition, when identifying and analyzing risks, it is important to take into account together both quantitative and qualitative indicators, allowing to assess the risk more accurately. The paper proposes an advanced methodology of risk management based on a hybrid SWOT and BSC-analysis, which allows to consider all the above mentioned approaches. The application of the tool is illustrated using the example of three groups of commercial banks in Russia.
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Pages: 269-282
WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 13, 2016, Art. #25