The impact of digital transformation on corporate banking risk assessment: A case study of United Bank for Africa, Lagos.
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Background of the Study
Digital transformation has become a critical catalyst for improving risk assessment processes in corporate banking. United Bank for Africa (UBA), Lagos, has integrated advanced digital tools such as real-time data analytics, AI-driven predictive models, and automated monitoring systems to enhance its risk assessment framework (Oluwaseun, 2023). These technologies enable the bank to quickly analyze vast amounts of financial data, identify potential risks, and implement proactive measures to mitigate them. By automating routine risk assessments and employing predictive analytics, UBA aims to reduce the likelihood of defaults and fraud, thereby protecting its asset base and ensuring regulatory compliance (Ibrahim, 2024).
The transformation involves the replacement of manual, time-consuming processes with digital solutions that provide real-time insights and dynamic risk models. This digital approach not only improves the accuracy of risk evaluations but also supports faster decision-making by management. However, the process of digital transformation presents challenges such as data quality issues, system integration complexities, and cybersecurity concerns (Adeleke, 2025). The bank’s efforts to balance innovative risk assessment methods with the stability of legacy processes remain a critical focus in its transformation journey. This study examines the impact of digital transformation on risk assessment practices at UBA, exploring how these innovations contribute to improved risk management and overall corporate banking performance (Chinwe, 2025).
Statement of the Problem
Despite the benefits of digital transformation, UBA, Lagos, encounters several challenges in modernizing its risk assessment processes. A significant problem is the difficulty in integrating new digital risk assessment tools with existing legacy systems, resulting in data discrepancies and delays in risk reporting (Ogunleye, 2023). These integration issues can undermine the accuracy and timeliness of risk evaluations. Additionally, the high cost of advanced analytics platforms and continuous system maintenance places financial pressure on the bank, which may limit the scope of digital transformation initiatives (Ibrahim, 2024).
Furthermore, cybersecurity vulnerabilities in digital systems expose the bank to potential threats that can compromise sensitive financial data, thereby affecting risk assessment reliability. Resistance to change among risk management personnel and inadequate digital training further exacerbate these challenges, resulting in a gap between the theoretical advantages of digital transformation and its practical implementation. This study seeks to investigate these issues and propose solutions to enhance the effectiveness of digital risk assessment in corporate banking.
Objectives of the Study
• To evaluate the impact of digital transformation on risk assessment processes at UBA, Lagos.
• To identify challenges in integrating digital risk tools with legacy systems.
• To assess the role of cybersecurity and training in improving risk assessment accuracy.
Research Questions
• How does digital transformation enhance risk assessment in corporate banking at UBA?
• What are the main challenges in integrating digital risk assessment tools with legacy systems?
• How do cybersecurity measures and staff training influence the effectiveness of digital risk assessment?
Research Hypotheses
• H1: Digital transformation significantly improves the accuracy and timeliness of risk assessment in corporate banking.
• H2: Integration challenges between digital tools and legacy systems negatively impact risk assessment outcomes.
• H3: Robust cybersecurity and effective training are positively correlated with improved risk management.
Scope and Limitations of the Study
This study is confined to the corporate banking division of UBA in Lagos. Limitations include restricted access to internal risk data and the continuously evolving regulatory environment.
Definitions of Terms
• Digital Transformation: The integration of digital technologies to improve business processes.
• Risk Assessment: The process of identifying and evaluating potential risks.
• Predictive Analytics: Techniques used to forecast future outcomes based on historical data.
• Cybersecurity: Measures implemented to protect digital systems from threats.
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