Risk Management In Institutions Research Articles

Роль бухгалтерського обліку в управлінні ризиками на прикладі фінансових інститутів

The article discusses the role of accounting in identifying and managing risks, in particular on the example of financial institutions. The specifics of financial institutions and their risks, in particular credit, interest, liquidity and market risks, are studied. The article defines the role of accounting in assessing these risks, as well as in managing them through internal control, analysis of financial statements and development of risk management strategies. Specific examples and guidance are provided on how accountants can identify, assess, and minimize risk in financial institutions while ensuring compliance with norms and regulations. The aim of the study is to substantiate the need to involve specialists in the accounting and analytical profile in the process of making effective decisions on risk management of a financial entity. In modern conditions, financial institutions are in an unstable economic, political and technological environment, which leads to a significant increase in uncertainty. This creates a complex set of potential risks that, if mismanaged, can lead to losses, damage, or even destroy the company’s business model and reputation. One of the key competencies of accountants today is the ability to identify potential risks in time to avoid them or effectively manage them. The scientific novelty of the study lies in the disclosure of the expediency of involving accountants in the decision-making process and the development of a policy of integrated risk management of a financial entity in order to preserve its value. It is concluded that a professional accountant is important in risk management for financial institutions and the role of a proactive approach to risk management, in which accountants are key players, is emphasized. It is emphasized that integrated risk management should be considered as an important aspect of modern business, which helps organizations to effectively manage various types of risks, including financial, operational, reputational, etc. This approach allows companies to more accurately analyze, assess, and manage risks, minimizing potential losses and increasing the likelihood of achieving their goals. Integrated risk management involves the implementation of specific strategies, processes, instruments, and systems that are integrated into the company’s overall strategy and business processes. This approach also contributes to increased transparency and improved corporate governance, which in turn increases trust from investors, partners, and customers. In addition, integrated risk management enables companies to be more adaptable to changing market conditions and respond quickly to potential threats and opportunities.

Climate Change Risk Management in Financial Institutions: Strategies and Challenges

Climate Change Risk Management in Financial Institutions: Strategies and Challenges

Mapping the Financial Risk Management Landscape: A Bibliometric Analysis of Recent Trends and Influential Contributions

This bibliometric analysis explores recent trends and influential contributions in financial risk management, shedding light on thematic clusters, keyword occurrences, and highly cited works. The analysis encompasses a wide array of literature, ranging from the integration of risk considerations into broader corporate strategies to the impact of technological advancements on risk management practices. Thematic clusters reveal the interconnectedness of business practices, corporate social responsibility, and risk management, while keyword occurrences highlight dominant themes like financial performance and credit risk management. Highly cited works by notable authors provide foundational insights into risk management for financial institutions, emphasizing liquidity risk, corporate governance, and the integration of theoretical frameworks with practical applications. The synthesis of these findings offers a comprehensive understanding of the evolving landscape of financial risk management, guiding researchers, practitioners, and policymakers in navigating the complexities of risk in contemporary financial contexts.

Financial performance determinants of Ukrainian agricultural companies in the pre-war period

Purpose. The purpose of the article is to identify the determinants of the financial performance of agricultural companies in Ukraine in the pre-war period.
 Methodology / approach. Panel data regression analysis, carried out using the GRETL software, was used as a research method. The financial statements of thirty Ukrainian agricultural companies over the defined period 2015–2021 were selected to be data for analysis. Three models were constructed in the article based on the use of three different dependent variables (Return on Assets, Return on Equity, Return on Sales) and seven independent variables (Current Ratio, Capital Intensity, Export Intensity, Leverage, Size, Dummy variable for agricultural sub-sectors, Dummy variable for location). The selection of the mentioned independent variables was logically substantiated by the structure of the financial reports of the Ukrainian agricultural companies and analytical system “You Control”.
 Results. The study of the determinants of financial performance of the agricultural companies is a widespread area of research among academicians, however, is characterized by quite controversial results. Some of these conclusions were refuted, but certain results were confirmed on the example of Ukrainian enterprises. The results of the panel regression analysis with respect to Models 1-3, partially are in contradiction with the conclusions of other studies regarding the impact of the determinants on the financial performance of agricultural companies. None of the chosen independent variables has a significant effect on all the dependent variables as investigated in the article, namely ROA, ROE, and ROS. This confirms the formulated in the study hypothesis regarding the availability of a unique set of financial performance determinants for agricultural enterprises for each individual country. The independent variables used in the study have the most significant impact on ROA. Primarily, ROA is significantly affected by CAPI (5 % level), EXPI (10 % level), and DVL (5 % level). The results obtained confirm a need for improving regional support and ensuring an access to capital for agricultural enterprises in Ukraine.
 Originality / scientific novelty. The originality of the conducted research lies in the study of a set of factors that influenced the financial condition of Ukrainian agrarian companies in the pre-war period, considering the peculiarities of the Ukrainian agrarian sector of the economy.
 Practical value / implications. Investors and financial institutions can benefit from the research results. By recognizing which factors have the most significant impact on financial performance, they can make more informed decisions when considering investments in Ukrainian agricultural companies. Understanding which factors influence financial performance can help in risk management for both agricultural companies and financial institutions.

RISK MANAGEMENT IN AFRICA'S FINANCIAL LANDSCAPE: A REVIEW

This review paper examines the critical role of risk management in Africa's financial landscape. It sets out to achieve three primary objectives: to explore the historical development of the financial sector in Africa, review the literature on risk management in financial institutions, and evaluate the effectiveness of regulatory measures in ensuring financial stability. The study uncovers key findings that underscore the growing significance of effective risk management practices in African financial institutions. It highlights adopting advanced technologies and regulatory harmonization as pivotal factors shaping risk management approaches. Additionally, the research underscores the importance of sustainable finance and the integration of Environmental, Social, and Governance (ESG) factors into risk assessments. These findings emphasize that risk management not only ensures financial stability but also contributes to sustainable and responsible financial practices. The broader implications of this study extend to economic stability, investor confidence, and cross-border cooperation. Effective risk management practices mitigate financial risks and support the ongoing regional integration efforts in Africa, such as the African Continental Free Trade Area (AfCFTA). Ultimately, the study underscores that the future prosperity of African economies is closely tied to embracing evolving risk management practices, fostering a resilient financial landscape in the region.
 Keywords: Risk Management, Financial Institutions, Africa, Financial Stability, Regulatory Framework, Sustainable Finance, Regulatory Compliance, Cybersecurity, Crisis Management, Data Privacy.

Critical Success Factors Manajemen Risiko di Lembaga Pengelola Bantuan Sosial

Risk management is an important thing to know, not only in the profit-oriented for private sector, but also in government and non-profit-based social institutions. Previous research has shown evidence of problems where social institutions have not yet implemented risk management while several regulatory references have been made available to improve risk management implementation. The purpose of this study is to determine the implementation of risk management and critical success factors in social management institutions. This study uses a qualitative research method with a case study approach to institutions that manage earthquake social assistance in Central Sulawesi Province in 2018. Data collection was carried out by researchers using field study methods and literature. Secondary data was obtained from internal documents, laws and regulations related to the implementation of risk management on the object of research, while primary data was collected through interviews with informants and then reduced to draw conclusions. The results of the analysis show that the object of the research has implemented risk management. Based on observations through interviews conducted with 5 (five) implementers in each institution, it shows that of the 7 (seven) critical success factors, Education and Training are critical factors in the implementation of risk management in Social Assistance Management Institutions. Strengthening the understanding of risk management for implementers can assist institutions in managing risk management better. This research is expected to provide understanding to social assistance management institutions so that risk management can be applied to prevent possible risks that may occur.

Applicability of Indigenous knowledge and methods in flood risk management in a nigerian city

The incidence of flooding is set to rise due to climate impacts in the coming years. Nigeria is one of the countries increasingly experiencing flooding. Its urban areas are expected to suffer more from the impacts of flooding due to the concentration of economic activities therein and projected population growth. To sustainably manage flood risks, there is a growing call to incorporate indigenous knowledge and practices in contemporary flood risk management. This work engaged with experts working in the field of flood risk management in public institutions to understand if indigenous knowledge and methods could positively inform modern flood risk management in Port Harcourt, a major flood prone Nigerian city. It finds that the applicability of indigenous knowledge in contemporary flood management in the research location is limited given the poorly managed transformation, growth, and evolution the city has experienced over time. However, some practice rooted in Indigenous knowledge and practices like planting of certain trees and mangrove species still have utility today. The government is encouraged to halt reclamations and conversions of wetlands and instead, seek ways of restoring and bringing back these important ecosystems given their natural role in flood mitigation and control. Developing urban forests can also play an integral role in managing rainwater runoff while improving the overall environmental quality.

Special Issue of the `Journal of Risk Management in Financial Institutions`

Special Issue of the `Journal of Risk Management in Financial Institutions`

Effective risk management for financial institutions’ partnerships with FinTechs

The aim of this paper is to provide insights into the regulatory concerns and challenges faced by financial institutions when partnering with FinTech companies. The paper highlights the recent consent orders issued against well-known financial institutions for their FinTech relationships and risk management programme shortcomings, as well as how financial institution and FinTech collaboration can overcome these shortcomings. It acknowledges the frustration caused by the limited guidance provided by regulators on incorporating FinTech into financial institution operations. However, it encourages financial institutions to learn from the published consent orders and improve their risk management programmes. The paper also discusses the factors that need to be considered in FinTech partnerships, such as overborrowing, bias and discrimination in algorithms, and data privacy and reliability. It emphasises the importance of compliance professionals in analysing regulatory considerations early and creatively to meet future demands. Furthermore, the paper explores the changing landscape and increasing reliance on technology, highlighting areas that need to be considered in financial institution risk management programmes. It addresses concerns related to alternative credit models, bias and discrimination in algorithms, and data privacy and reliability. Overall, readers can expect to gain knowledge and insights into the regulatory concerns and challenges associated with FinTech partnerships, as well as practical actions and considerations to mitigate risks and ensure compliance.

Maturity Level of Fraud Risk Management in Tax Institutions in Indonesia

This study aims to determine the maturity level of fraud risk management in the tax payer compliance supervision function at the head office level run by VW and the XYZ units. The Enterprise Anti-Fraud Maturity Assessment Model was implemented to provide a clear picture of conditions and effectiveness, as well as the existing gaps between the implementation and ideal conditions based on the principles of COSO Fraud Risk Management. The descriptive qualitative research uses a case study approach by collecting data from semi-structured interviews with 12 informants involved in risk management and fraud risks handling, then all documents are analyzed. As for the data analysis technique, content analysis is selected. The purpose of this study is to provide a tool for DGT (The Directorate General of Taxes) to determine the role and level of fraud risk management in the taxpayer compliance supervision function. The results which are at level 2 (initial) indicate that there is still a lot of room for improvement in order to achieve the desired maturity level target. DGT, especially the VW unit and XYZ unit, are suggested to immediately integrate fraud risk management with the existing anti-fraud programs and strengthen the role of the units involved in accordance with the COSO (Committee of Sponsoring Organizations) Fraud Risk Management principles.

Mainstreaming Decentralization and Collaboration in Disaster Risk Management: Insights from Coastal Bangladesh

Bangladesh is renowned in disaster risk reduction (DRR) for active involvement of community people and local disaster management institutions in DRR activities. Our study aimed to describe the disaster risk management (DRM) institutions and assess their functioning in six coastal unions across the three coastal zones of Bangladesh. Both qualitative and quantitative research approaches were used. The study focused on two key local institutions—the Union Disaster Management Committees (UDMCs) and the Cyclone Preparedness Program (CPP)—functioning at the union level in DRM. Such institutions have both horizontal and vertical collaborations with other institutions. However, we argue that the UDMCs’ external dependencies in their functioning indicate their limited financial and administrative autonomy, which is a barrier to successfully institutionalizing disaster management. The results show that the CPP is the most successful program, markedly increasing the trust of the people in warning dissemination and evacuation efforts in the event of a cyclone. Although the adoption of decentralized risk management systems has resulted in significant progress in increased rate of evacuation and reduced death rate and damage, lack of funding and equipment, limited coordination between institutions, lack of skilled and knowledgeable workforce, and inappropriate power structures may reduce the effectiveness of DRR activities prior to, during, and following disasters.

Pricing of Credit Default Swaps from the Perspective of Credit Enhancement in PPP Projects

The difficulty in financing has become the primary obstacle in the process of promoting a public–private partnership (PPP). Asset securitization is a financial model that can exchange the predictable cash flow of illiquid PPP project assets with the current cash flow, and credit enhancement is crucial in this process. Different from the traditional external credit enhancement of PPP projects based on government guarantees, this paper introduces an innovative credit risk management tool, i.e., credit default swaps (CDS), into the process of asset securitization in the PPP model. In order to avoid opportunistic behavior caused by information asymmetry in the process of financial product transaction, a CDS trading contract between PPP project investors and risk management institutions based on the principal–agent theory and a flexible CDS pricing model is proposed. Through a demonstration case of the Leshan to Rongjiang Expressway in China, the volatility correlation among CDS contract default probability, pricing, and related factors, such as default limits, operation period, compensation amount, project investment return, investment return volatility, and PPP project investors’ expected inputs, is obtained. The study shows that (1) appropriate CDS pricing helps to generate investors’ high expected inputs and diligence with controls; (2) there is a positive correlation between the change of default limit and compensation amount, and the set value of default limit should not be too high, otherwise it may induce the increase of default probability; and (3) based on the high return on assets and moderate asset volatility of PPP projects, the probability of default of CDS contracts is low. The innovative financial mechanism developed by the principal–agent theory could enrich the credit enhancement methods in asset securities of PPP projects.

Wakalah Financing Guarantee Law and Risk Management in Sharia Financial Institutions

This paper discusses the theory of guarantees on financing associated with wakalah contracts and also risk management in Islamic Financial Institutions (LKS). This research is a qualitative research using a normative juridical approach. Analysis and presentation of data will be using analytical descriptive method. The data collection method used in this paper is a library study or documentation study. The author is of the view that the shahibul maal financial institution in the form of shahibul maal gains the trust of everyone to carry out the mandate to use funds in a fair and correct manner and must be followed by the correct bonds and conditions in accordance with Islamic law, so as to be able to benefit all those concerned. Islamic banks as one of the sharia financing institutions must have guidelines for Islamic provisions, as well as for carrying out economic activities. Islamic banks must always pay attention to obtain profits, so that it is good if banks and customers are in accordance with Islamic law and regulations.

Information Technology Risk Management in Educational Institutions Using ISO 31000 Framework

As information technology becomes increasingly integrated into daily business processes within educational institutions in Indonesia, the need to address potential risks associated with this integration has become crucial. This research focuses on analyzing information technology risk management in Indonesian educational institutions using the ISO 31000 framework. The study aims to minimize the occurrence and impact of various information technology risks that can disrupt organizational processes. Through a comprehensive examination encompassing risk assessment, analysis, evaluation, and treatment, this research provides valuable insights into identifying potential risks within educational institutions. Furthermore, the findings serve as a reference for formulating risk management policies, enabling institutions to proactively mitigate the possibility of information technology risks and their future impact. By adopting the ISO 31000 framework, educational institutions can enhance their efficiency, effectiveness, and accessibility while safeguarding against potential disruptions.

Corporate governance and risk management in Islamic and convectional financial institutions: explaining the role of institutional quality

PurposeThis study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and conventional financial institutions (CFIs) of Pakistan. It also investigated the moderating role of institutional quality (IQ) in shaping the effects of CG practices on financial institutions of Pakistan.Design/methodology/approachA sample of 57 financial institutions including commercial banks, insurance companies and Modarba companies over the period 2006–2017 is used to carry out the empirical analysis. The authors applied the robust two-step system-generalized method of moments estimator, which is also called the dynamic panel data estimator. They also built the PCA-based composite index of CG and IQ by using different indicators to investigate the moderating role of IQ. They used three proxies for risk taking, five for CG and one for Shari’ah governance. To test the validity of the instruments, they applied the Arellano and Bond’s (1991) AR (1) and AR (2) tests and the J-statistic of Hansen (1982).FindingsThe results provided strong evidence that several individual characteristics of CG and the composite index are significantly related to the operational risk, the liquidity risk and the Z-score (a proxy for solvency risk). The results also revealed that IQ significantly and substantially contributes in reducing the level of risks. Finally, the estimation results indicated that the effects of CG on risk management are significantly different at IFIs and CFIs. This differential impact is mainly attributed to the fundamental differences in business models, operational strategies and contractual obligations of both types of institutions.Practical implicationsThe findings of this study are important for enhancing our understanding of how CG relates to risk taking in Islamic and conventional financial services industries and how good quality institutions are important for formulating the governance effects on the risk-taking behavior of financial institutions. The findings suggest that a suitable size of board should be chosen to manage the risk effectively. As the findings show that the risk-taking behavior of IFIs differs from that of CFIs, the regulators and international standard setting bodies should tailor the regulatory frameworks accordingly.Originality/valueThis paper is different from the existing studies in four aspects. First, to the best of the authors’ knowledge, this is the first empirical investigation in Pakistan, which does the comparison of IFIs and CFIs while examining the impacts of CG on risk management. Second, the paper constructs the composite index of CG by considering several different indicators of governance and examines the combined effect of governance indicators on risk management process. Third, this paper adds to the growing literature on the role of IQ by investigating whether it acts as a moderator between CG structures and risk management and if yes, then whether this moderating role is different for IFIs and CFIs. Finally, the paper builds upon the existing research work on the CG effects for different types of financial institutions by proposing a single regression based analytical framework for comparing the effects across two different types of institutions, harvesting the benefits of higher degrees of freedom and avoiding/minimizing the measurement error.

Manajemen Resiko dalam Perubahan Budaya Kerja Perguruan Tinggi Keagamaan Islam Swasta di Lombok

This paper aims to find out the urgency of risk management in the development of private Islamic religious tertiary institutions, to read threats and opportunities, leadership commitment, the contribution of risk management implementation to institutional progress, and to use swot analysis in calculating policies and decisions. This institution has several characteristics in academic, sociological, anthropological and political aspects with internal and external problems in the form of limited human resources, infrastructure and accreditation of institutions and study programs which are still low and a very poor partnership network. Qualitative methods are used to study various phenomena and problems by matching empirical reality with an objective focus, with a case study approach, determining key informants and researchers as key instruments. Primary data collected is directly related to research questions, data obtained through observation, interviews and documentation. Data was collected and then analyzed with an interactive approach. The application of risk management in private Islamic religious tertiary institutions can reduce threats and increase opportunities, establishing program certainty can be a guarantee to the community. Leaders of foundations, Islamic boarding schools and institutions implement risk management to increase public trust in PTKIS in Lombok, as evidenced by the resilience to acculturation and empowerment in the community running effectively. SWOT analysts are able to provide signals to community members to accelerate quality management.

Double or triple combination therapy in systemic arterial hypertension: to whom, when and with what?

La hipertensión arterial sistémica (HAS) es el principal factor de riesgo para muerte prematura en el mundo y en México.1 Se estima que existen 15.2 millones de mexicanos con diagnóstico de HAS, de los cuales 7.48 millones son derechohabientes del IMSS (evaluación de los riesgos financieros considerados en el Programa de Administración de Riesgos Institucionales, ENSANUT, 2018).2

Risk Management for Cash Waqf Institutions Based on Good Corporate Governance Perspective: Lessons Learned from an Islamic Rural Bank in Indonesia

Waqf, including cash waqf, is one of the Islamic social finance instruments that has been playing a significant role to develop community welfare throughout the history of Islam. Nowadays, Cash waqf significantly grows globally in countries like Saudi Arabia, Egypt, Kuwait, Turkey, Bangladesh, Malaysia, and Singapore. The unique feature of cash waqf is though it is subject to value volatility, shariah imposes that the value of cash waqf should not depreciate hence appreciation is required. Involving different parties in the process of cash waqf management, several risks may arise including moral hazards, conflict of interest, non-shariah compliance events, and so on. Thus, risk management becomes a must in managing cash waqf. Studies have deliberated on this issue and concluded with various findings. This study aims to use a Good Corporate Governance (GCG) perspective to examine risk management in the management of cash waqf at BPRS Barokah Dana Sejahtera. A qualitative method using semi-structured interviews was deployed to obtain primary data which has some extent of more comprehensive information to be analyzed rather than secondary data. This study concludes with some points including advantageous impacts on Cash Waqf Management Institution (LKS-PWU) regarding financial performance and the mauquf alaih nuance resulting from effective risk management. Moreover, the implementation of GCG principles as a framework for risk management in Cash Waqf institutions encourages the community to continuously contribute to cash waqf through LKS-PWU.

Modernising operational risk management in financial institutions via data-driven causal factors analysis: A pre-registered study

In an effort to contribute a quantitative, objective and real-time tool to proactively and precisely manage the factors underlying and exacerbating operational risks, this pre-registered study executes the empirical methodology approved in the associated pre-registered report (Cornwell et al., 2023). The application of the Bayesian network-based approach to an Australian insurance company shows that integrating a financial institution's loss and operational data in this way can effectively model the probability of an operational loss event within its interconnected operational risk environment. Further insights and efficiencies are gained by modelling multiple operational loss events together, rather than in isolation. A novel two-module framework derived specifically for causal factors analysis from the resulting operational risk model helps to highlight the relative importance of causal factors, their collective effects and critical thresholds requiring proactivity. These insights derived from the framework are expected to be strategically valuable in helping an organisation design intentional and targeted controls for and monitoring of operational risks. Given existing knowledge of the improvements quantitative risk management tools make to risk management effectiveness and subsequently firm value, the enhanced risk management and the operational efficiencies this tool seeks to afford should ultimately contribute to driving financial performance and firm value.

Identifying obstacles encountered at different stages of the disaster management cycle (DMC) and its implications for rural flooding in Pakistan

The world has seen a number of natural hazards, but among them, floods are perhaps the most frequent devastating natural hazard, resulting in more human causalities and financial losses. Rural inundation has become an issue of concern in various parts of the world, including Pakistan. Over the past few decades, it has been hard for local institutions and rural populations to recover from the trauma inflicted by these events. The disaster risk management cycle is a well-known tool for coping with disasters and their consequences. Yet, the DRM cycle efficacy has been questioned in various rural settings. Thus, this paper applied a programmatic strategy to understand the challenges disaster management authorities and communities face in managing flood risks through the conventional disaster management cycle in Khyber Pakhtunkhwa province, Pakistan. The study objective was accomplished by using both qualitative and exploratory research designs. Four communities (namely, Peshawar, Charsadda, Nowshera, and Dera Ismail Khan) with a historical record of flooding were chosen for focus group discussion (32 in total) using a purposive sampling method. Additionally, 31 key informant interviews were undertaken from pertinent local disaster risk management institutions. We employed a thematic analysis to classify responses and obstacles into the various stages of the disaster management cycle. The findings of this study from interviews and focus groups provided some new insight into the conventional DRM cycle. The issues and challenges encountered by institutions and the community members were divided into four stages: 1-mitigation, 2-preparedness, 3-rescue and relief (R&R), and 4-rehabilitation and recovery (R&R). Based on the findings, it seems that local disaster management institutions still rely on reactive strategies and deal with flood hazards on an ad hoc basis. Poor governance and a lack of responses for present development trajectories were also highlighted as reasons why flood risk management is still challenging. There is an urgent need to perform susceptibility and risk assessments for multiple hazards and develop specialized plans that follow disaster risk reduction principles and adaptation to climate change. This study recommends incorporating resilience and adaptation to climate change into the current disaster management cycle to prevent or reduce future hazards and risks in rural areas.