Research on Internal Control of Chinese Commercial Banks Based on Comprehensive Risk Management

Abstract

The dynamic and complex nature of global financial markets has necessitated the evolution of internal control mechanisms within commercial banks, especially within the context of Chinese financial institutions which operate in a rapidly changing economic environment. This study delves into the intricacies of internal control systems in Chinese commercial banks, scrutinizing their effectiveness through the lens of comprehensive risk management practices. Employing a mixed-methods approach that combines quantitative data analysis with qualitative case studies, this research examines the extent to which these banks have integrated risk management into their internal control frameworks. The analysis focuses on financial, operational, compliance, and strategic risks, providing a holistic view of the internal control landscape. Key findings reveal that while many Chinese commercial banks have made significant strides in embedding risk management principles into their internal controls, there remain notable inconsistencies and gaps, particularly in areas related to emerging financial technologies and regulatory compliance. Moreover, the study highlights the critical role of organizational culture and leadership in fostering an environment conducive to effective risk management. This research contributes to the existing body of knowledge by offering insights into the challenges and opportunities facing internal control systems in Chinese commercial banks. It underscores the necessity of adopting an integrated risk management approach to enhance resilience and competitiveness. Furthermore, the findings have practical implications for policymakers, regulators, and banking professionals, suggesting pathways for strengthening the internal control mechanisms to mitigate risks and capitalize on opportunities in the evolving financial landscape.