Operational risk management and competitive advantage in the ghanaian banking industry: A Case Study of Ecobank Ghana Limited
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Date
August, 2015
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Abstract
The Banking industry today is characterized by intense rivalry coupled with rapid
changes in customer expectations, increasing regulatory requirements, technological
innovation. Failures in processing activities as a result of human errors, fraud and system
failures bring significant losses to banks and these losses are key sources of operational
risk. In view of the rising competition within the industry in respect of customer
satisfaction and retention, corporate reputation and reward maximization, there is the
need for banks to critically align business objectives with risk and control information to
enhance operational performance, reduce cost in order to achieve the competitive
advantage. The study focuses on how operational risk management and competitive
advantage in the Ghanaian banking industry; a case study of Ecobank Ghana Limited.
Interviews were conducted at various branches of Ecobank. The findings of the study
indicated the components of operational risk and various strategies used to mitigate these
risks, it reveals that Ecobank are realizing the significance and importance of operational
risk management as a tool for gaining competitive advantage, it also reveals challenges
encountered in managing operational risks and strategies utilized to curb challenges
posed by operational risk. It is therefore recommended that Banks must link their
operational risk management activities to their business objectives and identify the
potential hurdles that hinder their competiveness; Operational risk management is the
responsibility of all staff including the Board of Directors and management and as such
awareness must be created on the need to identify, evaluate, monitor, control and report
operational risk issues in accordance with the strategies and policies of banks in ensuring
the adequacy of capital against operational risk.
Description
A Thesis Submitted to the Accounting and Finance Department, Kwame Nkrumah University of Science and Technology (KNUST), Kumasi, in partial fulfillment of the requirements for the degree of Master of Business Administration (MBA) Finance.