DOI: https://doi.org/10.36719/2663-4619/113/84-89
Kanan Valizadeh
Baku Business University
https://orcid.org/0009-0009-6855-2788
kenanvelizade84@gmail.com
Economic Aspects of Operational Risk Management in the Banking
Sector Under Digital Transformation
Abstract
This article explores the theoretical and economic foundations of operational risk management in the banking sector under conditions of digital transformation, focusing on the root causes, impact mechanisms, and conceptual management models. The results confirm that effective operational risk management plays a strategic role in ensuring banking resilience and financial stability, requiring integrated, technology-based, and proactive approaches. The paper emphasizes that the rapid advancement of digital technologies has altered the nature of operational risks, making them more complex and dynamic. The study highlights that risk management approaches relying solely on technical solutions are insufficient and must incorporate human behavior, legal compliance, and organizational culture. It is also established that the application of artificial intelligence and automated systems plays a crucial role in predicting risks and optimizing response mechanisms. Analytical findings recommend the use of scenario-based models and behavior-driven tools to enhance operational risk assessment in banking institutions. Furthermore, the study underscores the dual importance of state-level regulatory oversight and the sophistication of internal control systems within banks. Ultimately, the research demonstrates that managing operational risks in the digital age requires not only theoretical justification but also the integration of technological innovation into risk governance strategies.
Keywords: operational risk, digital transformation, risk management, banking sector, technological innovation