The impact of Enterprise Risk Management (ERM) in Achieving Financial Sustainability in Banks

Abstract

Abstract: The aim of this is to assess the effect of Enterprise Risk Management and its dimensions: event identification, risk assessment, and control activities, on financial sustainability at Jordanian commercial banks. This study used a descriptive-analytical approach in terms of methodology with a focus on a specified study community represented by 12 Jordanian commercial banks. The sample consisted of senior-level risk managers, financial officers, compliance officers, and ERM specialists. From the total of 300 electronic questionnaires distributed, 270 were returned and analyzed using SPSS software. The results of the study have shown that ERM factors make an important contribution to the financial sustainability of these banks, and from the factors, Event Identification was most influential. It proves the logical deduction that the more proactive the risk management steps taken, the more it enhances banks' financial stability. The study shows that Jordanian commercial banks should strengthen their ERM frameworks in order to face the complexities of the financial environment, which would enable the banks to perform well and efficiently on financial aspects.