The effect of strategic risk management on business banking performance: A case study of Zenith Bank, Kano
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Background of the Study
Strategic risk management has become integral to the stability and growth of business banking operations. Zenith Bank in Kano has implemented comprehensive risk management frameworks aimed at identifying, assessing, and mitigating risks that could adversely affect its business banking performance. By adopting proactive risk assessment tools and scenario planning, the bank is able to anticipate market uncertainties and adjust its strategies accordingly. This approach not only minimizes potential losses but also enhances decision-making processes, contributing to overall performance improvements (Adebola, 2023).
The bank’s risk management strategy incorporates quantitative models and qualitative insights to manage credit, market, and operational risks. With an increasing focus on digital transformation, Zenith Bank utilizes advanced analytics and real-time monitoring systems to enhance risk forecasting and response capabilities. These measures are designed to support business banking operations by ensuring that risk exposures are kept within acceptable limits and by safeguarding the bank’s assets. In addition, the strategic alignment of risk management with overall business objectives has enabled the bank to achieve a competitive advantage in the volatile financial environment (Oluwaseun, 2024). Despite these advancements, challenges persist in integrating risk management practices into daily operations and aligning them with rapid market changes. Regulatory uncertainties and the evolving nature of financial risks further complicate the risk management landscape (Chin, 2025). This study examines the effect of strategic risk management on the performance of Zenith Bank’s business banking division, identifying key success factors and areas for improvement.
Statement of the Problem
Zenith Bank, despite implementing strategic risk management frameworks, experiences difficulties in fully aligning risk management practices with business banking performance. A primary challenge is the integration of advanced risk assessment tools with traditional decision-making processes, which often results in delayed responses to emerging risks (Adebola, 2023). Moreover, the complexity of current market conditions, coupled with rapid technological changes, makes it challenging to maintain a robust risk management framework that is both adaptive and effective. High compliance costs and the need for continual upgrades to risk management systems further strain operational resources. Additionally, inconsistent risk communication across departments and resistance to adopting new risk practices among middle management hinder the seamless execution of risk strategies (Oluwaseun, 2024). Regulatory uncertainties and global economic fluctuations also contribute to a lack of confidence in existing risk management approaches, which can negatively impact business performance (Chin, 2025). This study aims to critically analyze these issues, exploring the relationship between strategic risk management and business banking performance while providing recommendations to bridge the identified gaps.
Objectives of the Study
- To assess the effectiveness of current strategic risk management practices at Zenith Bank.
- To identify challenges in integrating risk management with business banking operations.
- To recommend strategies for improving risk management alignment with performance outcomes.
Research Questions
- How does strategic risk management influence business banking performance at Zenith Bank?
- What challenges hinder the effective integration of risk management practices?
- What improvements can be implemented to enhance risk management and business outcomes?
Research Hypotheses
- H₁: Effective strategic risk management positively influences business banking performance.
- H₂: Integration challenges between traditional and digital risk management systems negatively impact performance.
- H₃: Improved interdepartmental risk communication enhances overall risk management effectiveness.
Scope and Limitations of the Study
This study is confined to Zenith Bank’s business banking division in Kano, focusing on strategic risk management practices over recent fiscal periods. Limitations include potential variability in risk reporting and the dynamic nature of market conditions.
Definitions of Terms
- Strategic Risk Management: The systematic process of identifying, assessing, and mitigating risks to achieve business objectives.
- Business Banking Performance: The effectiveness and efficiency of banking services provided to commercial clients.
- Risk Assessment Tools: Technologies and methodologies used to evaluate potential risks.
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