Abstract
This paper investigates the risk management practices in e-banking of major UK banks, using the framework of principles introduced by the Basel Committee on Banking Supervision (BCBS). The initial pilot study involves four interviews conducted with staff members of one of the leading UK banks on risk management for e-banking. The main research instrument is a questionnaire divided into three sections covering board management and oversight, security controls and legal and reputational risk management. The questionnaire is used across ten major UK banks to establish whether they are operating in line with these risk management principles. The interviewees suggest that the main risk to customers using e-banking is security risk and that the bank is focusing on mitigating that risk. Our findings from the questionnaire indicate that the UK banks have successful risk management systems that help to stop potential electronic risk and reduce the losses incurred from risks associated with e-banking. Our results also confirm that UK banks are complying with the 14 BCBS risk principles and are well managed in terms of their security controls for e-banking. With the continued phenomenal growth and investment into e-banking the authors recommend that UK banks must avoid a repetition of the recent complacencies seen with on-line payments, corporate governance issues and the rising tide of complaints, that are referred to the financial ombudsman. They must also ensure they keep up-to-date security systems to reduce the security risk to different parties and that staff members are fully trained on legal and reputational risk management practices.
| Original language | English |
|---|---|
| Pages (from-to) | 19-31 |
| Number of pages | 13 |
| Journal | Banks and Bank Systems |
| Volume | 9 |
| Issue number | 3 |
| Publication status | Published - 2014 |
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An investigation of risk management practices in electronic banking : The case of the UK banks. / Abdou, Hussein A.; English, John; Adewunmi, Paul O.
In: Banks and Bank Systems, Vol. 9, No. 3, 2014, p. 19-31.Research output: Contribution to journal › Article
TY - JOUR
T1 - An investigation of risk management practices in electronic banking
T2 - The case of the UK banks
AU - Abdou, Hussein A.
AU - English, John
AU - Adewunmi, Paul O.
PY - 2014
Y1 - 2014
N2 - This paper investigates the risk management practices in e-banking of major UK banks, using the framework of principles introduced by the Basel Committee on Banking Supervision (BCBS). The initial pilot study involves four interviews conducted with staff members of one of the leading UK banks on risk management for e-banking. The main research instrument is a questionnaire divided into three sections covering board management and oversight, security controls and legal and reputational risk management. The questionnaire is used across ten major UK banks to establish whether they are operating in line with these risk management principles. The interviewees suggest that the main risk to customers using e-banking is security risk and that the bank is focusing on mitigating that risk. Our findings from the questionnaire indicate that the UK banks have successful risk management systems that help to stop potential electronic risk and reduce the losses incurred from risks associated with e-banking. Our results also confirm that UK banks are complying with the 14 BCBS risk principles and are well managed in terms of their security controls for e-banking. With the continued phenomenal growth and investment into e-banking the authors recommend that UK banks must avoid a repetition of the recent complacencies seen with on-line payments, corporate governance issues and the rising tide of complaints, that are referred to the financial ombudsman. They must also ensure they keep up-to-date security systems to reduce the security risk to different parties and that staff members are fully trained on legal and reputational risk management practices.
AB - This paper investigates the risk management practices in e-banking of major UK banks, using the framework of principles introduced by the Basel Committee on Banking Supervision (BCBS). The initial pilot study involves four interviews conducted with staff members of one of the leading UK banks on risk management for e-banking. The main research instrument is a questionnaire divided into three sections covering board management and oversight, security controls and legal and reputational risk management. The questionnaire is used across ten major UK banks to establish whether they are operating in line with these risk management principles. The interviewees suggest that the main risk to customers using e-banking is security risk and that the bank is focusing on mitigating that risk. Our findings from the questionnaire indicate that the UK banks have successful risk management systems that help to stop potential electronic risk and reduce the losses incurred from risks associated with e-banking. Our results also confirm that UK banks are complying with the 14 BCBS risk principles and are well managed in terms of their security controls for e-banking. With the continued phenomenal growth and investment into e-banking the authors recommend that UK banks must avoid a repetition of the recent complacencies seen with on-line payments, corporate governance issues and the rising tide of complaints, that are referred to the financial ombudsman. They must also ensure they keep up-to-date security systems to reduce the security risk to different parties and that staff members are fully trained on legal and reputational risk management practices.
KW - E-banking
KW - Risk management
KW - Security risk
KW - UK
UR - http://www.scopus.com/inward/record.url?scp=84960924751&partnerID=8YFLogxK
M3 - Article
VL - 9
SP - 19
EP - 31
JO - Banks and Bank Systems
JF - Banks and Bank Systems
SN - 1816-7403
IS - 3
ER -