The role of digital transformations in the banking sector: between opportunities for financial stability and risks of innovation (a case study of a sample of Iraqi banks)

• اسراء فياض

  جامعة واسط / كلية الادارة والاقتصاد/ قسم العلوم المالية والمصرفية

  Author

• ولاء عبد النبي عبود

  Author

• علاء جاسم محمد

  Author

This research aims to analyze the role of digital transformations in the banking sector by examining their dual impact: on one hand, enhancing financial stability, and on the other hand, increasing the risks of banking innovations (cyber and operational risks). The research adopted the descriptive analytical method. A questionnaire was designed to collect data from a simple random sample of (93) employees working in government and private banks. The data were analyzed using SPSS software through reliability tests (Cronbach's Alpha), descriptive analysis, and simple linear regression. The results concluded the acceptance of the first hypothesis, which confirms a statistically significant effect of digital transformation on financial stability, and the acceptance of the second hypothesis, which confirms a statistically significant effect of digital transformation on banking innovation risks. The arithmetic means also showed a high level of digital transformation and a high perception of its associated risks. The research recommended the need for balanced investment in infrastructure and cybersecurity, adopting internal regulatory policies and pre-risk assessment, developing sustainable training programs for employees, creating digital Key Performance Indicators (KPIs) to measure the dual impact, and updating the regulatory legislation of central banks and establishing cross-border supervisory units. 

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