Business risk in emerging markets: evidence from the banking sector of Ghana.

The importance of risk cannot be overemphasised. In practice and among academic scholars, risk has been a high-profile topic due to the recurring global financial crises (GFC) and the dynamic nature and complexity risk presents. Nevertheless, minimal academic literature has holistically addressed current and emerging risks. The study, therefore, examined the management of current and emerging business risks in the banking Industry. Additionally, this study examined proactive strategies employed by banks for curbing emerging risks. A qualitative approach involving semi structured interviews was employed to gather relevant data from fifteen (15) selected commercial banks in Ghana. The data generated were used to identify the risk management process of commercial banks in Ghana and proactive strategies for curbing emerging risks within their operations. In total, the respondents were made up of fifteen (15) risk managers, fifteen (15) non risk staff, and three (3) risk consultants. The results showed that Ghanaian banks had adopted COSO enterprise risk management and its components in practice. There was a risk identification, assessment, monitoring, and control process. Additionally, though there are processes for addressing new risks, 90% of the banks interviewed do not have a proactive strategy for new (emerging) risks. Further, credit risk, cyber risk, information asymmetry, money laundry, and operational risk are the most prevailing risks in Ghana’s banking industry. The results however reveal that, model risk, cyber risk, regulatory risk, government risk, and robbery are perceived to be emerging. Finally, the study reveal a strong risk management culture, as most banks encourage staff participation in risk decision-making.