The Impact of Credit Information Technology, Risk Management Strategy, Compliance, and Restructuring Policies on Credit Risk Are All Mediated by the Risk Management Process, with Internal Control Acting as A Moderator

Tuk Yulianto
Faculty of Economics and Business, UNTAG Surabaya, Indonesia..

Tri Ratnawati
Faculty of Economics and Business, UNTAG Surabaya, Indonesia..

Ulfi Pristiana
Faculty of Economics and Business, UNTAG Surabaya, Indonesia..

Abstract:

Internal Control adheres to fixed norms aimed at upholding bank stability. However, in extraordinary circumstances requiring special measures to balance the national economy and commercial bank credit risk, Internal Control should be adapted accordingly. During periods of extraordinary economic challenges, there is an urging for regulators to adapt Banking Risk Management Theory, particularly concerning Credit Risk, to uphold economic growth. Banks are advised to prioritize preventive control measures within their internal control framework, rather than relying solely on corrective control measures, especially given the challenges posed by the Covid-19 pandemic. The integration of preventive controls can proactively address potential difficulties arising from increased credit risk. This study explores the credit operations of Indonesian commercial banks with a focus on assessing the ways in which the Credit Risk Management Process is impacted by various factors, including Credit Risk Management Strategy, Regulation Compliance, Credit Information Technology Utilisation, and Credit Restructuring Policies. The impact of credit information technology, risk management strategy, compliance, and restructuring policies on credit risk are all mediated by the risk management process, with internal control acting as a moderator. The impact of credit information technology, risk management strategy, compliance, and restructuring policies on credit risk are all mediated by the risk management process, with internal control acting as a moderator. The impact of credit information technology, risk management strategy, compliance, and restructuring policies on credit risk are all mediated by the risk management process, with internal control acting as a moderator. In Indonesia, there is a commonly held opinion that the function of compliance might impede company competitiveness and banking operations.