INCREASING THE EFFICIENCY OF COMMERCIAL BANK FUNCTIONING ON THE FINANCIAL MARKET BY MINIMIZING BANKING RISKS
Abstract
The article examines the composition of the financial market and the role and place of commercial banks within it. The market for banking services is characterized as a segment of the financial market that encompasses a wide range of products and services related to money management, lending, storage, investment, and other financial operations. The effectiveness of a commercial bank's operations is discussed, and the key indicators for its evaluation are determined. It is emphasized that monetary policy shapes the operating conditions for commercial banks, impacting their profits, risks, and their ability to provide financial services. It is crucial for commercial banks to adapt to changes in monetary policy by managing their activities and risks in accordance with the new conditions. The article also demonstrates that with the introduction of new financial technologies and constant competition in the financial market, commercial banks are compelled to seek innovative ways to develop banking services. Expanding the range of banking services and incorporating modern information technologies into the bank's functions enables the achievement of key bank management goals, including enhancing the efficiency and quality of customer service, reducing costs associated with banking products, optimizing information workflows, and increasing competitiveness in the financial services sector. In addition to a commercial bank's ability to adapt to changes in the global financial environment and introduce new technologies and innovations to enhance its operations and competitiveness, effectively managing risks related to loans, investments, liquidity, and other aspects of banking activity is of utmost importance. The article explores the essence of banking risk and its primary types. It also outlines strategies to minimize banking risks, such as conducting thorough client analyses, portfolio diversification, implementing effective risk management practices, collaborating with regulators, adopting security technologies, and monitoring market conditions while assessing liquidity. These measures collectively serve to improve the operational efficiency of a commercial bank, mitigate the adverse effects of its activities, and increase income and capital gains.
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