Trending Challenges in Banking Industry

Abstract: Continued global economic crises, ongoing digitalization, recent developments in technology, and the increased use of artificial intelligence in banking have spotlighted credit risk management. Consequently, regulators continue to demand transparency and improved capabilities in this space. They want to know that banks have thorough knowledge of customers and their associated credit risk. As Basel regulations evolve, banks face an even greater regulatory burden. Many banks overhaul their approaches to credit risk to comply with ever-changing regulatory requirements and manage risk better. However, banks that view this as strictly a compliance exercise are shortsighted. Better credit risk management presents an opportunity to improve overall performance and secure competitive advantage. Therefore, research on the different types of risk faced by banks has both theoretical and practical significance. This study provides an overview of risk identification for the banking business, basic risk management framework, types of risk, banking business, and basic risk regulation in the banking industry.