ENHANCING PERFORMANCE IN THE BANKING SECTOR: A CONCEPTUAL FRAMEWORK FOR THE EFFECT OF FRAUD RISK MANAGEMENT AND RISK CULTURE

Abstract

The banking sector operates in a dynamic and complex environment, making it susceptible to various risks, including fraud. Effective fraud risk management and a strong risk culture are crucial for enhancing performance and safeguarding the integrity of the banking sector. This paper presents a conceptual framework that explores the relationship between fraud risk management, risk culture, and performance in the banking sector. The framework highlights the importance of proactive fraud risk management practices, supported by a robust risk culture, in achieving superior performance. It proposes that a strong risk culture, characterized by ethical values, risk awareness, and accountability, is essential for the successful implementation of fraud risk management strategies. The framework provides a foundation for further empirical research and offers valuable insights for banking institutions to improve their performance by strengthening fraud risk management practices and cultivating a positive risk culture.