An examination of operational risk management in business banking: A case study of Stanbic IBTC Bank, Abuja
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Background of the Study
Operational risk management is a critical component in the sustainability of business banking operations. Stanbic IBTC Bank in Abuja has implemented comprehensive risk management frameworks to identify, assess, and mitigate operational risks. These risks, which include system failures, human errors, fraud, and external disruptions, have the potential to significantly impact service delivery and financial performance (Udo, 2023). The bank’s approach to risk management involves the integration of advanced analytics, real-time monitoring systems, and robust internal controls to minimize disruptions. By proactively addressing operational risks, Stanbic IBTC Bank aims to safeguard its assets, ensure regulatory compliance, and enhance customer confidence in its business banking services (Nwachukwu, 2024).
The dynamic nature of business banking necessitates a resilient risk management framework that can adapt to evolving challenges. In today’s competitive environment, even minor operational disruptions can lead to significant financial losses and damage to reputation. Consequently, the bank has invested in state-of-the-art technologies and risk assessment methodologies that enable early detection and swift response to potential threats. This proactive approach not only reduces the likelihood of operational failures but also supports continuous improvement in risk mitigation strategies (Chidiebere, 2025). The present study seeks to examine the operational risk management practices at Stanbic IBTC Bank, with a focus on identifying the strengths and weaknesses of current methodologies. The goal is to provide insights that will enable the bank to enhance its risk management framework, thereby ensuring smoother and more secure business banking operations.
Statement of the Problem
Despite the implementation of advanced risk management systems, Stanbic IBTC Bank continues to face challenges in fully mitigating operational risks. A primary problem is the difficulty in integrating new risk management technologies with existing legacy systems, which can lead to data inconsistencies and delays in risk identification (Udo, 2023). Moreover, human errors and process inefficiencies remain significant contributors to operational disruptions, despite the deployment of automated systems. The bank’s current framework sometimes struggles to capture emerging risks in a timely manner, particularly those related to cyber threats and market volatility (Nwachukwu, 2024). Additionally, limited interdepartmental communication and siloed data practices hinder the development of a comprehensive risk profile, further complicating efforts to manage operational risk effectively (Chidiebere, 2025). These challenges not only expose the bank to potential financial losses but also affect customer trust and overall operational stability. This study, therefore, aims to critically evaluate the existing operational risk management framework at Stanbic IBTC Bank, identify its limitations, and propose strategies for enhancing its effectiveness in mitigating operational risks.
Objectives of the Study
- To assess the current operational risk management practices at Stanbic IBTC Bank.
- To identify the challenges and gaps in the existing risk management framework.
- To recommend strategies for improving operational risk mitigation.
Research Questions
- How effective are the current operational risk management practices at Stanbic IBTC Bank?
- What are the main challenges affecting the integration of risk management technologies?
- What strategies can be implemented to enhance operational risk mitigation?
Research Hypotheses
- H₁: There is a significant relationship between advanced risk management practices and reduced operational disruptions at Stanbic IBTC Bank.
- H₂: Integration issues with legacy systems negatively impact the effectiveness of risk management frameworks.
- H₃: Improved interdepartmental communication leads to enhanced operational risk mitigation.
Scope and Limitations of the Study
This study focuses on Stanbic IBTC Bank’s business banking operations in Abuja, analyzing recent data on operational risk incidents and mitigation practices. Limitations include challenges in obtaining real-time risk data and the rapidly evolving nature of operational risks.
Definitions of Terms
- Operational Risk Management: The process of identifying, assessing, and mitigating risks associated with daily banking operations.
- Legacy Systems: Older computing systems that may not fully integrate with modern technology.
- Risk Mitigation: Strategies and processes aimed at reducing the impact of identified risks.
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