Applying the Meta-Synthesis Method in Banking Operational Risk Management Methodology

Abstract

In recent years, after the economic crises, the value of operational risk assessment has been observed in the financial industry, while the biggest impact of operational risk has been on the banking industry. As a result, more attention has been paid to operational risk assessment in the banking industry after the financial crisis. Operational risk is defined as the risk of loss caused by the inadequacy or inefficiency of internal processes, people, systems, or external events. In this regard, institutions and banks have been looking for operational risk assessment by taking different approaches, including the approaches of the Basel Committee. The current research aimed to review operational risk management in the banking industry. Using the meta-synthesis method, 643 related research documents between 2000 and 2022 were gathered from among reliable scientific databases. By using this method, 43 final documents made the basis for extracting the findings. Finally, this method identified 5 main categories, including operational risk, risk assessment, risk quantification methods, risk analysis, and risk management, as well as 10 subcategories consisting of 43 concepts and 169 codes. The results were confirmed based on the experts’ opinions with a kappa index of 0.756.Keywords: Operational risk, Advanced Measurement Approach, Basic Index Approach, Standard Approach, Risk Management. IntroductionThe significant losses suffered by financial and non-financial institutions from various non-credit and non-market processes and factors have made many managers and decision-makers of these organizations pay attention to the field of "operational risk". Operational risk and its management methods are significant topics in the banking industry. They have potential effects on the performance of banks and financial institutions. According to the conducted research, authors have looked at risk from different perspectives. The relevant groups have focused on the definition of risk, classification of operational risk events, measurement and characteristics of operational risk management, and comparative analysis of different estimates (Barakat & Hussainey, 2013). Method and DataThe current study was an applied research based on collecting documentary information. Using the meta-combination method, 643 related research documents between 2000 and 2022 were gathered from reliable scientific databases. By using this method, 43 documents finally made the basis for extracting the findings. FindingsUsing the meta-synthesis method, 643 related research documents between 2000 and 2022 were gathered from reliable scientific databases. By using this method, 43 documents made the basis for extracting the findings. Finally, this method identified 5 main categories, including operational risk, risk assessment, risk quantification methods, risk analysis, and risk management, as well as 10 subcategories, 43 concepts, and 169 codes. The results were confirmed based on the experts’ opinions with a kappa index of 0.756. Discussion of results & Conclusion In this research, the studies conducted in the field of operational risk were classified by using the meta-synthesis method. The meta-synthesis method was consisted of 7 steps. First, the questions related to the research were designed. In the second stage of the systematic literature review, 643 related articles in the field of operational risk from 2000 to 2022 were collected. In the next step, the related articles were selected based on title, abstract, and text. Then, 43 related articles were identified and 169 codes were extracted. Afterwards, the data analysis and data synthesis were done and the numbers of main categories, subcategories, and concepts were identified. In the sixth stage, quality control was performed and used to determine the value of Cronbach's alpha from the experts’ points of view. In the last stage, the relationships between the research findings were shown by using a tree diagram. In the field of operational risk, the meta-synthesis method had not been used for systematic review, classification, and categorization of the results of the articles. In this research, unlike the previous research, the related articles were classified by using the meta-synthesis method. Then, the categories and concepts were extracted and the relationships between them were shown in the form of a tree diagram.

Keywords

• operational risk
• advanced measurement approach
• basic index approach
• standard approach
• risk management