Strategic Risk Assessment
Strategic risk is the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. This risk is a function of the compatibility of an organization’s strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation. The resources needed to carry out business strategies are both tangible and intangible. They include communication channels, operating systems, delivery networks, and managerial capacities and capabilities. The organization’s internal characteristics must be evaluated against the impact of economic, technological, competitive, regulatory, and other environmental changes.
Strategic risk penetrate by intuitive decisions taken by the executives, most often budgeted allocation for the banking are not appropriate for the E-banking project. The Strategic risk can be assessing by the company assets and customer ratio, profits and ROI. Turnover ration of customer can tell the exact picture, high turnover ration indicates the problem may be system are not able to handle huge amount of customer. Long term investment decision should be taken with care it will help to grow the business and develop positive image of the bank in the eyes of customers.