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The banking industry is exposed to various risks, including credit risk, market risk, operational risk, and liquidity risk. The paper reviews the traditional risk management practices employed by commercial banks and explores the emerging innovative strategies that aim to address the challenges and complexities of the modern banking landscape. The study evaluates the effectiveness, advantages, and limitations of both traditional and innovative risk management approaches, providing insights into their application and implications for commercial banks. Risk management plays a crucial role in safeguarding the stability and integrity of banking institutions, particularly in an ever-changing and complex financial landscape. The paper reviews the traditional risk management practices employed by commercial banks, including credit risk, market risk, operational risk, and liquidity risk management. Additionally, it explores the emerging innovative strategies that leverage advanced technologies such as artificial intelligence, machine learning, and big data analytics to enhance risk assessment and mitigation. Through a comprehensive comparative analysis, the paper evaluates the effectiveness, advantages, and limitations of both traditional and innovative risk management approaches. It examines factors such as efficiency, scalability, regulatory compliance, and adaptability to changing market dynamics. The study also addresses the cultural and organizational challenges associated with the implementation of innovative risk management strategies in traditional banking institutions. The findings of this comparative analysis provide valuable insights into the strengths and weaknesses of traditional and innovative risk management approaches, helping commercial banks navigate the complexities of risk management. The paper concludes by offering implications and recommendations for commercial banks aiming to enhance their risk management practices. The recommendations highlight the importance of striking a balance between traditional risk management fundamentals and the adoption of innovative strategies. They emphasize the need for investment in advanced technologies, talent development, regulatory alignment, and ongoing evaluation of risk management frameworks.