The Impact of Risk Analysis on Managerial Decision-Making: A Case Study of Fidelity Bank Plc
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- NGN 5000
Background of the Study
In an era of heightened uncertainty and global economic fluctuations, effective risk analysis has emerged as a cornerstone of managerial decision-making, especially in the banking sector (Kaplan & Atkinson, 2023). Banks like Fidelity Bank Plc operate in a highly regulated and competitive environment, where identifying, assessing, and mitigating risks are critical to sustaining operations and achieving strategic objectives. Risk analysis facilitates informed decision-making by providing insights into potential threats and opportunities, thereby enabling managers to make decisions that align with organizational goals.
The adoption of advanced risk analysis tools, including financial modeling, sensitivity analysis, and scenario planning, has been instrumental in enhancing decision-making processes in the banking industry (Obi & Adekunle, 2024). These tools help in evaluating market, credit, and operational risks, which are pivotal in maintaining a bank’s stability and profitability. Despite its advantages, many banks face challenges in integrating comprehensive risk analysis into their decision-making frameworks due to a lack of expertise, inadequate technological infrastructure, and resistance to change.
This study explores how risk analysis impacts managerial decision-making at Fidelity Bank Plc, focusing on its application in strategic planning and operational efficiency.
Statement of the Problem
Fidelity Bank Plc, like many financial institutions in Nigeria, operates in a volatile economic environment characterized by currency fluctuations, inflation, and regulatory uncertainties. These challenges necessitate robust risk analysis mechanisms to support managerial decisions. However, several issues hinder the effective implementation of risk analysis, including limited access to real-time data, reliance on outdated risk assessment techniques, and insufficient integration of risk analysis into strategic decision-making (Okeke & Balogun, 2025).
These challenges can lead to suboptimal decision-making, exposing the bank to financial losses, reputational damage, and regulatory penalties. The limited adoption of modern risk analysis tools also undermines the bank’s ability to anticipate and mitigate potential risks effectively. This study seeks to address these gaps by examining the role of risk analysis in managerial decision-making within Fidelity Bank Plc.
Objectives of the Study
- To evaluate the role of risk analysis in managerial decision-making at Fidelity Bank Plc.
- To identify the tools and techniques used in risk analysis within the bank.
- To assess the challenges and opportunities associated with integrating risk analysis into the bank’s decision-making processes.
Research Questions
- How does risk analysis influence managerial decision-making at Fidelity Bank Plc?
- What tools and techniques are employed for risk analysis within the bank?
- What challenges and opportunities exist in integrating risk analysis into the bank’s decision-making processes?
Research Hypotheses
- Risk analysis significantly influences managerial decision-making at Fidelity Bank Plc.
- The use of advanced risk analysis tools enhances decision-making effectiveness in the bank.
- Challenges in integrating risk analysis affect its impact on managerial decision-making.
Scope and Limitations of the Study
This study focuses on Fidelity Bank Plc, examining its risk analysis practices and their impact on managerial decision-making. The scope includes an analysis of tools, techniques, and challenges. Limitations include restricted access to proprietary data and potential biases in respondent feedback.
Definitions of Terms
- Risk Analysis: The systematic process of identifying, assessing, and mitigating potential risks that may impact an organization’s objectives.
- Managerial Decision-Making: The process of selecting the best course of action among alternatives to achieve organizational goals.
Financial Risk: The possibility of financial loss due to market fluctuations, credit defaults, or operational failures.
