From legacy to agile: The role of digital strategy in driving finance transformation for systemic risk management in commercial banking
Independent Researcher, USA.
Research Article
World Journal of Advanced Research and Reviews, 2024, 24(02), 2938-2949
Publication history:
Received on 07 October 2024; revised on 22 November 2024; accepted on 29 November 2024
Abstract:
The global banking sector faces unprecedented challenges in managing systemic risks amid rapid technological evolution and increasing regulatory complexity. This research examines the transformative role of digital strategy in transitioning commercial banks from legacy systems to agile frameworks for enhanced systemic risk management. Through a comprehensive analysis of digital transformation initiatives, this study investigates how strategic implementation of emerging technologies—including artificial intelligence, blockchain, cloud computing, and advanced analytics—fundamentally reshapes risk assessment, monitoring, and mitigation capabilities. Employing a mixed-methods approach combining quantitative analysis of 150 commercial banks across 25 countries and qualitative insights from industry practitioners, findings reveal that banks with mature digital strategies demonstrate 47% improved risk detection accuracy and 52% faster response times to systemic threats. The research develops a comprehensive Digital Strategy Framework for Finance Transformation (DSFFT) that integrates technological infrastructure, organizational agility, and regulatory compliance. Results indicate that successful digital transformation requires synchronized evolution across four critical dimensions: strategic alignment, technological integration, process optimization, and data governance. This study contributes to theoretical understanding by bridging digital strategy literature with systemic risk management frameworks, offering practitioners actionable insights for navigating the complex transition from legacy to agile banking operations. The findings underscore that digital strategy is not merely a technological upgrade but a fundamental reimagining of risk management paradigms essential for banking sector resilience in the digital age.
Keywords:
Digital Strategy; Finance Transformation; Systemic Risk Management; Commercial Banking; Agile Framework; Financial Technology; Digital Banking; Risk Mitigation; Legacy Systems; Artificial Intelligence in Banking
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Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0