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How Do Financial Institutions Deal With Human Resource Risks?

Year: 2025

Type: article

Abstract: Human resource (HR) risks remain underexplored in both academic research and regulatory practice, despite their growing recognition as a key source of systemic risk in the financial sector. This study investigates the relationships between HR risk and other major risk domains, including Operational, Legal, AML, ESG, Strategic, and Governance risks. A systematic literature review of Scopus-indexed studies (2014–2025) identified only 22 relevant works, with just two briefly addressing staff-related risks and no established modeling framework. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), expert data from five EU financial institutions were analyzed. The results show that HR-specific threats explain 85.2% of the variance in HR risk, compared to only 12% in models using general threats. Findings suggest HR risk is tightly connected to governance, compliance, and organizational culture. Regulators and institutions should establish dedicated metrics, proactive controls, and strategic integration to mitigate HR risk.

Source: Zenodo (CERN European Organization for Nuclear Research)

DOI: 10.5281/zenodo.17306955

Authors: ELMIRA BALAPANOVA, KARLYGASH TASTANBEKOVA, AKMARAL SARSENOVA, ZHARAS KUATBEKOV, OLEGS CERNISEVS, SERGEJS POPOVS, YELENA POPOVA, NURALINA AMIRA, KARLYGASH TASTANBEKOVA

Institutions: Almaty Management University, International Taraz University named after Sherkhan Murtaza, SIA StarBridge (Latvia), Daugavpils University, Transport and Telecommunication Institute

Language: English

Topic: Risk Management in Financial Firms

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W7087061893

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