Basic Concepts of Risk Management in Organizational Management

Abstract

Digital transformation has expanded banks’ capabilities to provide fast, integrated, and data-driven services, but at the same time, it has increased their exposure to technology, cyber, operational, third-party, data, and sustainability risks. This article aims to identify the major risk groups in digital banking and establish risk priorities as a basis for strengthening risk mitigation. The study employs a descriptive-qualitative approach based on document analysis by reviewing regulations issued by the Financial Services Authority (Otoritas Jasa Keuangan/OJK), the framework of the Basel Committee on Banking Supervision (BCBS), and recent scholarly literature on banking digitalization, FinTech, cybersecurity, and operational risk. Risk identification was conducted by mapping risk sources, the likelihood of occurrence, impacts on operations and customers, and control requirements. The analysis identifies five major risk groups: cybersecurity and information security risk, data and privacy risk, technology and operational disruption risk, third-party risk/technology dependency, and climate/ESG risk. In the conceptual priority matrix, cybersecurity and information security risks, as well as technology disruption risks, receive the highest level of attention because they have the potential to disrupt critical services, cause financial losses, and undermine customer trust. This article develops an identification framework that links risk identification, assessment, prioritization, mitigation, monitoring, and operational resilience. The framework can serve as a basis for further empirical research and the development of risk management indicators for banks undergoing digital transformation.