ABSTRACT
The study sought to assess operational risks management by listed commercial banks in Ghana. The study adopted the descriptive research design approach. Purposive sampling technique was adopted in the selection of one hundred and three (103) respondents for the study. The study used quantitative data from both primary and secondary sources. The primary data was collected by using questionnaire. The study adopted both the descriptive and inferential data analysis. The study found among others that the main operational risks confronting commercial banks in Ghana are people related risks, information technology related risks, and process related risks. These risks positively influence the returns of commercial banks in Ghana. As part of the mechanisms in place to curtail debilitating impacts of operational risk in commercial banks, they have internally developed operational risk management procedures which incorporate the Basel III approaches to operational risk management. These operational risk management policies were deemed effective since the banks allocated appropriate resources to their operational risk management with management ensuring bank-wide operational risk awareness environments which are supported by appropriate and adequate organizational structure and processes to implement strong risk cultures. The study therefore recommended that management develop sensitization policies to sensitize employees and give appropriate training on operational risk management to entrench risk awareness firm-wide. These trainings should not only be regular but should be in tandem with emerging issues of ORM practices and strategic compliance.
TABLE OF CONTENTS
Page
DECLARATION ii
ABSTRACT iii
ACKNOWLEDGEMENTS iv
DEDICATION v
TABLE OF CONTENTS vi
LIST OF TABLES x
LIST OF FIGURES xi
CHAPTER ONE: INTRODUCTION
Background to the Study 1
Statement of the Problem 4
Research Objectives 4
Research Questions 5
Significance of the Study 5
Delimitations 6
Organization of the Study 6
CHAPTER TWO: LITERATURE REVIEW
Introduction 7
Theoretical Framework 7
Enterprise Risk Management (ERM) Theory 10
Definition of Concepts 11
Risk 11
Operational Risk 12
Types of Operational Risk 14
People Risk 14
Internal Operations 15
External Events 15
IT System Risks 16
Categories of Operational Risks in Commercial Banks 17
Operational Risk Management in the Banking Industry 20
Risk Identification and Analysis 21
Risk Assessment23
Risk Measurement23
Risk Monitoring 23
Controlling Risks 24
Empirical Review 24
Conceptual Framework 38
Conclusion 38
CHAPTER THREE: RESEARCH METHODS
Introduction 41
Research Design 41
Population of the Study 42
Sample and Sampling Procedure 43
Data Collection 44
Data Collection Instruments 44
Data Collection Procedure 45
Data Analysis 45
CHAPTER FOUR: RESULTS AND DISCUSSION
Introduction 46
Response Rate 46
Demographic Characteristics of Respondents 46
Operational Risks Confronting Commercial Banks 49
Effectiveness of the Operational Risk Management Policies Adopted by the Selected Commercial Banks 51
Relevance of Operational Risk in the Banking Industry in Ghana 51
The Allocation of Appropriate Resources in Support of Operational Risk Management Policy and Practice by Banks 52
Development of Close Links between Banks’ Strategic Objectives and Management of Operational Risk 53
Existence of Internally Developed Operational Risk Management Procedures or Guidelines? 54
Level of Compliance of Operational Risk Management Practices in the Banks 56
Operational Risk Management Approach Adopted by the Bank and the Level of Compliance 57
Risk Governance Adopted by the Surveyed Banks Adopted by the Bank and the Level of Compliance 60
Risk Oversight63
Effect of Operational Risk on the Performance of Commercial Banks 66
Effect of Operational Risk and Banks Performance 68
Discussion of Findings 69
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS
Introduction 72
Summary of Major Findings 72
Conclusions 74
Recommendations 75
Recommendations for Further Studies 76
REFERENCES 78
APPENDIX A
Project, S. (2021). ANALYSIS OF OPERATIONAL RISK MANAGEMENT: A CASE OF LISTED COMMERCIAL BANKS IN GHANA. Afribary. Retrieved from https://afribary.com/works/analysis-of-operational-risk-management-a-case-of-listed-commercial-banks-in-ghana
Project, Scopus "ANALYSIS OF OPERATIONAL RISK MANAGEMENT: A CASE OF LISTED COMMERCIAL BANKS IN GHANA" Afribary. Afribary, 06 May. 2021, https://afribary.com/works/analysis-of-operational-risk-management-a-case-of-listed-commercial-banks-in-ghana. Accessed 22 Dec. 2024.
Project, Scopus . "ANALYSIS OF OPERATIONAL RISK MANAGEMENT: A CASE OF LISTED COMMERCIAL BANKS IN GHANA". Afribary, Afribary, 06 May. 2021. Web. 22 Dec. 2024. < https://afribary.com/works/analysis-of-operational-risk-management-a-case-of-listed-commercial-banks-in-ghana >.
Project, Scopus . "ANALYSIS OF OPERATIONAL RISK MANAGEMENT: A CASE OF LISTED COMMERCIAL BANKS IN GHANA" Afribary (2021). Accessed December 22, 2024. https://afribary.com/works/analysis-of-operational-risk-management-a-case-of-listed-commercial-banks-in-ghana