Evaluating The Impact Of Financial, Cybersecurity, And Performance Risks On Banking Sector Sustainability: Evidence From Pakistan

Abstract

The sustainability of the banking sector is increasingly influenced by various risks, including financial risk, cybersecurity risk, and performance risk. This study examines the impact of these risks on banking sector sustainability, with a particular focus on the Pakistani context. A quantitative research design is adopted, utilizing a well-structured questionnaire. The sample size consists of 194 participants, including employees and consumers of banks, and responses collected through Google Forms. Convenience sampling is employed, and Smart PLS is used for data analysis. PLS-SEM analysis reveals that financial risk, cybersecurity risk, and performance risk significantly and negatively affect sustainability. These findings enhance the understanding of how risk management techniques encourage the sustainable growth of the banking industry in emerging economies. This study offers insightful information, for policymakers,   practitioners, and researchers regarding the impact of these risks on banking sector sustainability. By analyzing these risks collectively, this research identifies key vulnerabilities and proposes risk mitigation strategies to strengthen banking sector stability and resilience. Furthermore, this study contributes to the development of robust regulatory frameworks and promotes financial stability and inclusive economic growth in emerging markets.

Keywords: Financial Risk (FR), Cybersecurity Risk (CR), Performance Risk (PR), Sustainability (SUS), Partial Least Squares, Structural Equation Modeling (PLS-SEM)