The Effect of Group Support Systems on the Emergence of Unique Information in a Risk Management Process: A Field Study

Abstract

The management of operational risks, i.e., risks of loss resulting from inadequate or failed processes, people and systems or from external events, is crucial for the stability of financial institutions. The international Basel II Capital Accord therefore has imposed a strict timing on the banks’ compliance with sound risk management practice. In this paper, we present results from a field study at a large bank on the use of Group Support Systems (GSS) as a novel approach for senior managers to identify operational risks in the bank’s Incident Management Process. Our research leads to two important findings. First, we find that the use of GSS enables unique risks to reach a short-list of crucial risks to be managed by the bank. Second, the use of GSS allows an isolated minority of senior managers to implicitly influence the decision of the group on the risk management decision process.