Publication Details
Abstract
This study explores the institutional mechanisms of risk management in the banking sector, with particular emphasis on the role of digital transformation and regulatory frameworks in shaping effective risk governance. In the context of increasing financial volatility, globalization, and technological advancement, banks are exposed to a wide range of risks, including credit, market, operational, and cyber risks. The research aims to analyze how institutional structures - such as regulatory bodies, internal governance systems, and compliance mechanisms - contribute to the identification, assessment, and mitigation of these risks. The study employs a qualitative and analytical approach, drawing on international regulatory standards, including Basel III principles, as well as recent developments in financial technologies (FinTech), artificial intelligence, and big data analytics. Special attention is given to the interaction between traditional risk management frameworks and emerging digital tools that enhance predictive capabilities and operational resilience. The findings indicate that effective integration of digital technologies within institutional risk management frameworks significantly improves the adaptability and stability of banking systems. However, challenges remain in terms of regulatory alignment, cybersecurity threats, and the need for continuous institutional adaptation. The paper concludes with policy recommendations aimed at strengthening institutional capacity, enhancing regulatory coordination, and fostering innovation-driven risk management practices in the banking sector.