Assessing the impact of operational risk management on financial performance of service centre of commercial banks in Malawi.

This paper assessed the impact of operational risk management strategies on the financial
performance of the Commercial banks in Malawi. The study explored the relationship between risk
management practices and financial indicators like profitability, loan. Quality and efficiency.
Using the mixed method approach, quantitative data was collected through surveys and qualitative
insights were gathered from staff interviews. Key findings indicated that effective operational risk
management strategies such as thorough credit assessment. Proactive monitoring and employee
training significantly reduced non-performing loans and enhanced financial stability. The study
emphasized the importance of a strong risk culture, ensuring policies are not only followed but
embraced by staff, fostering a proactive risk management approach. Challenges identified included
limited resources, a disconnect between policy and practice, and insufficient inter-departmental
collaboration, which hinder effective risk strategy implementation. The findings highlighted the
need for continuous training programs and formal cross-departmental protocols to improve
collaboration and address emerging risks. Ultimately, the research concluded that operational risk
management is a strategic tool essential for the financial performance and resilience of the
commercial banks in Malawi, providing valuable insights into localized risk management practices
in the Malawian banking sector.
Furthermore, the study recommends strengthening the internal control systems. Enhancing the
regulatory compliance frameworks and integrating technology-driven risk assessment tools to
improve accuracy and responsiveness. It also underscores the role of leadership commitment in
promoting accountability and sustaining long term institutional performance. Additionally , the
research suggests periodic risk audits and performance evaluations to ensure continuous
improvement and adaptability within the dynamic banking environment