This research is dedicated to the development of a comprehensive model aimed at promoting sustainable competitive advantage through human resource improvement in the Iraqi banking sector. To achieve this goal, we conducted in-depth interviews with 11 experienced industry experts using both grounded theory and theoretical sampling strategies. The investigation focused on key players in the Iraqi banking sector, including TBI Bank, Rashid Bank, Rafidain Bank and Bank of Baghdad. Our study placed particular emphasis on sophisticated leadership styles, training programs and organizational culture as critical factors in the pursuit of sustainable competitive advantage. The results of this focus have been particularly evident in increased employee satisfaction, improved customer service standards and a significant increase in innovative practices within the industry. These results provide valuable insights into the complex dynamics of the Iraqi banking sector. Additionally, the findings have practical implications for industry leaders, providing them with actionable insights to optimize their strategic approaches. Furthermore, this study creates a solid basis for further research and investigation into various aspects of the Iraqi banking sector. In essence, this research contributes to a nuanced understanding of the dynamic interactions within the Iraqi banking sector. By presenting practical insights to industry leaders and laying the foundation for future explorations, it serves as an important resource for understanding and navigating the complex landscape of the Iraqi banking sector.