IMPROVING CRISIS MANAGEMENT IN BANKING INSTITUTIONS

Abstract

Banking has always been and continues to be a high-risk business, and modern methods of organising business processes in banking reinforce its particularly risky nature. This is currently due to a combination of technological and financial risks, as well as risks specific to banking activities. The relevance of this research is determined by the fact that the banking segment of the financial market is constantly under the influence of changes in its external environment. In addition, as a financial intermediary, a bank is influenced by internal factors that vary from one institution to another. Several objective factors contribute to this, such as the degree of specialisation or universality of the services offered by the bank to its clients, its customer focus, its regional concentration, the degree of digitalisation of its services, and more. The research methodology is based on a comprehensive approach that includes quantitative and qualitative methods of scientific inquiry. The study uses the statistical method to determine the resilience of the banking segment of the Ukrainian financial system; the matrix method to identify strengths and weaknesses, as well as opportunities and threats for the development of a hypothetical bank; the methods of situation analysis and critical link analysis to form fields of crisis management strategies; and the programme-target method to establish crisis management priorities and determine the stages of its system formation in a bank. The results of the research indicate that the Ukrainian banking system has accumulated a sufficiently high reserve of financial strength at the level of prudential requirements. However, the dynamic changes in business activity within the economic system raise significant concerns about the continued profitability growth of the sector. The study analyses the impact of external and internal environmental factors on the crisis management system of a hypothetical bank. Four strategic areas, based on a SWOT analysis, are proposed to improve crisis management measures. The importance of a customer-centric management approach is emphasised. The article suggests ways to improve the crisis management system, such as setting crisis management priorities within the bank's management system and identifying stages for its improvement, with the content of these stages being specified. The research has practical significance for the implementation of these aspects in the crisis management system of banking institutions.