The Impact of the Internal Environmental Risk of the Electronic Clearing System for Financial Performance: An Applied Study on Commercial Banks Operating in the City of Trahna

Abstract

The banking sector is the most important pillar of the economic environment in developed countries due to its impact on economic activity, including attracting savings, diversifying investments, improving profitability, and maintaining a competitive environment. However, this requires taking into account all environmental conditions affecting banks' financial performance. Cutting-edge technology in the banking sector, known as the electronic sukuk clearing system, aims to improve banking activities to serve each bank's objectives. However, risks related to the banking environment negatively impact the achievement of desired objectives. These risks include those related to the internal environment of the electronic clearing system. This study aimed to identify the impact of internal risks in the electronic clearing system (risks related to human resources in the banking sector, represented by management and employees) on financial performance. To achieve the study's objectives, a questionnaire was distributed to commercial banks in the city of Tarhuna to obtain results consistent with its objectives and content. The results revealed the impact of risks related to bank management and employees on the financial performance of commercial banks operating in the city of Tarhuna. Financial performance is significantly affected by internal risks in the electronic clearing system. The greater these risks, the lower the financial performance. This study recommends supporting bank management and providing them with banking risk management specialists capable of anticipating potential risks related to banking operations in order to achieve financial performance. It also recommends implementing training to improve the academic and practical qualifications of administrative staff who regularly interact with electronic clearing systems. It also recommends raising awareness among management and clearing employees about the importance of interacting with financial and banking technologies, understanding them, and monitoring them, which helps reduce the level of risk and ensure the expected benefit, namely financial performance.