May 21, 2019
The financial service industry has gone through a significant transformation over the last few decades. The rapid transformation and changing regulatory environments has resulted in a highly complex ecosystem. Stakeholders from different backgrounds who play influential roles in the banking industry bring new complexities. As a result, banking institutions need to adjust risk management procedures to accommodate risks that come with new players. Monitoring and managing these risks guarantee a safe transformation in banking.
Credit risk is a common banking risk that can be expressed in two ways:
The uncertainty involved in the repayment of banks dues.
Failure by borrowers to meet payment obligation regarding terms agreed upon with the bank.
Banks suffer heavy losses from ...