<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Banks face a number of business risks on a daily basis. Today, operational risk is dominant. The aim of this paper is to develop a decision-making system when choosing a method of operational risk management by using the Analytical Hierarchy Process (the AHP method) and the Fuzzy Analytic Hierarchy Process (the FAHP method). Analytical hierarchical process is a simple efficient process in solving decision-making problems. The final decision depends on the assessment of a set of alternatives and the decision criteria. The main purpose of the process is to find appropriate solutions for defined user factors in the current competitive environment. The results obtained by the classical AHP method, as well as the FAHP method, show that external factors are the dominant criterion, especially during the financial crisis or the Covid19 pandemic, and that solutions should be sought in international standards, using control tools created by the banks themselves.</p>
</abstract>

Banks face a number of business risks on a daily basis. Today, operational risk is dominant. The aim of this paper is to develop a decision-making system when choosing a method of operational risk management by using the Analytical Hierarchy Process (the AHP method) and the Fuzzy Analytic Hierarchy Process (the FAHP method). Analytical hierarchical process is a simple efficient process in solving decision-making problems. The final decision depends on the assessment of a set of alternatives and the decision criteria. The main purpose of the process is to find appropriate solutions for defined user factors in the current competitive environment. The results obtained by the classical AHP method, as well as the FAHP method, show that external factors are the dominant criterion, especially during the financial crisis or the Covid19 pandemic, and that solutions should be sought in international standards, using control tools created by the banks themselves.

Application of Multi-Criteria Assessment in Banking Risk Management

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Application of Multi-Criteria Assessment in Banking Risk Management"}

Banks face a number of business risks on a daily basis. Today, operational risk is dominant. The aim of this paper is to develop a decision-making system when...

Application of Multi-Criteria Assessment in Banking Risk Management

Published Online: Jun 09, 2023

Page range: 97 - 117

DOI: https://doi.org/10.2478/zireb-2023-0005

Keywords
operational risk, AHP/FAHP methods, decision-making

© 2023 Vladimir Ristanović et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Application of Multi-Criteria Assessment in Banking Risk Management

Published Online: Jun 09, 2023

Page range: 97 - 117

DOI: https://doi.org/10.2478/zireb-2023-0005

Keywordsoperational risk, AHP/FAHP methods, decision-making

© 2023 Vladimir Ristanović et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
operational risk, AHP/FAHP methods, decision-making