Risks of Banking Services’ Digitalization: The Practice of Diversification and Sustainable Development Goals

Francisco Zabala Aguayo and Beata Ślusarczyk
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Francisco Zabala Aguayo: Economic Analysis and Political Economy Department, Universidad de Sevilla, 41018 Seville, Spain
Beata Ślusarczyk: Faculty of Economic and Management Sciences, North-West University, Vaal Triangle Campus, Vanderbijlpark 1900, South Africa

Sustainability, 2020, vol. 12, issue 10, 1-10

Abstract: The study aims to investigate threats that might occur in diversification management, operational risks of banking services in the process of digitalization, as well as the impact on customers and banks. The right choice of a risk management model for a bank plays an important role in the sustainable development of competitiveness and the transformation of banking activities in the future. This work assesses bank risks and determines information risks in relation to the total capital of Santander Bank of Spain. The authors adapted an operational risk management (ORM) model to minimize the risks of the bank’s digitalization and upcoming operational risks. The ratio of the total operational risk to the total bank’s capital was 0.65%, which is below the permissible minimum value and is acceptable. Based on this indicator, diversification of business risks can be applied. As a result of the study, the total value of operational risks was calculated and the acceptability of this indicator to the capital of Santander Bank was assessed, which allowed the authors to assess whether the value was critical. In addition, it was also revealed that the main external risk of Santander Bank in 2018 was fraud in the use of online payments. The results might help to more effectively evaluate insurance payments for identified operational risks and effectively make decisions and optimize reporting documents of banks.

Keywords: sustainable development; global banking ecosystem; sustainable financing; cyberattacks; digitalization; diversification risk; operational risk (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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