The findings matter as banks worldwide face rising pressure to balance profitability with resilience, governance, and sustainability. Regulators increasingly emphasize sustainable finance, but this research highlights that rules alone are not enough. What happens inside banks—how employees understand risk and how institutions shape risk-related values—can significantly determine whether banking operations remain sustainable over time.
Why Sustainable Banking Depends on Internal Risk Culture
Sustainable banking has become a global priority amid economic volatility, financial crises, and growing environmental and social risks. Banks are no longer evaluated solely on short-term financial performance. Instead, long-term operational resilience, governance quality, and responsible risk-taking now define success.
In developing economies such as Indonesia, these challenges are even sharper. Regional banks often operate with limited resources while facing strict compliance requirements. According to Purwati’s research, this environment makes internal governance—especially risk awareness and organizational culture—critical to sustainability.
Previous banking studies have largely focused on regulations, capital adequacy, or risk models. Fewer have examined the behavioral side of risk management. This study fills that gap by showing how employees’ understanding of risk and the shared culture within banks directly support sustainable operations.
How the Research Was Conducted
The study used a quantitative survey approach to examine everyday risk practices inside banks. Data were collected from 80 employees working in conventional commercial banks across Palembang City.
Key features of the methodology include:
· Survey design: Structured questionnaires measured employees’ perceptions of risk awareness, risk management culture, and sustainable banking practices.
· Participants: Permanent bank employees with at least one year of experience and direct involvement in operational or administrative tasks.
· Analysis: Statistical regression analysis assessed how strongly risk awareness and risk management culture influenced sustainable banking operations.
By focusing on employees rather than policy documents, the study captured how risk management is actually practiced at the operational level.
Key Findings: Culture Matters More Than Awareness Alone
The results clearly show that both individual and organizational factors matter—but not equally.
Main findings include:
· Risk awareness has a positive impact. Employees who understand operational, compliance, and sustainability risks help support long-term banking stability.
· Risk management culture has a stronger effect. Shared values, norms, and behaviors related to risk management exert a more powerful and consistent influence on sustainability than individual awareness alone.
· Combined influence is substantial. Together, risk awareness and risk management culture explain 42.2 percent of the variation in sustainable banking operations among the surveyed banks.
Statistical results indicate that while employees’ understanding of risk is important, sustainability improves significantly when risk management values are embedded across the organization.
What the Findings Mean for Banks and Policymakers
The study carries clear implications for banking leaders, regulators, and policymakers.
For bank management, the message is straightforward: training employees to recognize risk is necessary but not sufficient. Banks need to actively cultivate a risk-aware culture where responsible behavior is reinforced through leadership, incentives, and daily practices.
For regulators and policymakers, the findings suggest that sustainable banking frameworks should encourage internal cultural development, not just formal compliance. Strengthening governance standards around risk culture could improve resilience across the financial system, particularly in regional banks.
For society and the economy, stronger risk management cultures reduce the likelihood of banking failures, protect depositors, and support stable economic development at the local level.
Insight from the Researcher
Purwati emphasizes that sustainable banking depends on how deeply risk values are internalized within organizations. Reflecting on the findings, she explains that sustainability is shaped not only by regulations but also by everyday behavior inside banks.
Drawing from the study’s conclusions, Purwati of Politeknik Negeri Sriwijaya notes that when risk management becomes part of organizational culture, employees consistently apply prudence in decision-making, even in uncertain conditions. This cultural alignment, she argues, is essential for long-term banking sustainability.
Author Profile
Purwati, M.M. is a lecturer and researcher at Politeknik Negeri Sriwijaya, Palembang, specializing in banking risk management, organizational culture, and sustainable finance. Her work focuses on how behavioral and cultural factors influence financial governance and operational resilience in the banking sector.
Source
Journal Article Title: Risk Awareness and Management Culture in Supporting Sustainable Banking Operations
Journal: Formosa Journal of Science and Technology
Year: 2026
DOI: https://doi.org/10.55927/fjst.v5i1.382
Official URL: https://traformosapublisher.org/index.php/fjst
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