The Impact of Enterprise Risk Management on Financial Performance in the Uk Banks

HRMARS - This study explores the effect of Enterprise Risk Management (ERM) implementation on the financial performance of banks in the United Kingdom, grounded in various ERM-related theories and regulatory guidelines. It also examines whether firm size moderates the relationship between ERM implementation and financial performance. A quantitative approach was employed, using a structured questionnaire distributed via email. A total of 90 valid responses were collected from banking professionals. The data were analyzed using Partial Least Squares Structural Equation Modeling (SmartPLS 4). The results indicate that ERM implementation has a significant positive impact on the financial performance of UK banks. However, firm size was not found to significantly moderate this relationship. These findings suggest that while ERM contributes to better financial outcomes, its effectiveness is not dependent on the size of the institution. The study provides practical implications for banking professionals seeking to enhance risk management frameworks and supports the importance of systematic ERM practices across banks of varying sizes. Additionally, it contributes to the academic literature by reinforcing the value of ERM in the financial services sector and identifying areas for further research.