Assessment of Risk Identification Techniques Practiced in Banking Sector: Comparative Study Between State and Private Commercial Banks in Ethiopia

In every organization, the task of risk identification is the pre-requisite of other stages of risk management; otherwise, absence of risk identification can be a source of error occurrences in all the steps that can also lead to non-achievement of objectives. The study-assessed risk recognition techniques practiced by Ethiopian commercial banks and data collected through cross-sectional design using structural questionnaire and interview, purposively from 204 risk management experts of all 17 commercial banks was analysed by descriptive and independent t-test, which revealed that there was insufficient common awareness on adverse outcome and its management in banking sectors in Ethiopia, the extent of understanding risk and exercise of risk identification was significantly different between state and private commercial banks. The significant difference of using interview method, document review/financial statement analysis and checklist techniques noted between State and Private Banking sectors in Ethiopia as techniques of risk identification