Over the past few years, operational risk has gained much attention in the financial services industry. This is partially because many of the largest losses in the financial industry have their roots in the failure of operational risk. As the financial technology becomes more and more advanced, and the industry moves further towards globalization, the […]
Operational Risk Management Framework
Definition of Operational Risk
Operational risk is a very broad concept and it is very difficult to agree on one common definition that fits everyone’s needs. Operational risk primarily focuses on risks arising from failures in processes, systems, and people, and can also include things such as fraud, legal risk, etc. One of the most widely used definitions of […]
Types of Operational Risk
The financial institutions encounter a variety of operational risks on a daily basis. It’s important that businesses are able to identify these risks and the losses incurred from them. The Basel Committee on Banking Supervision (BCBS) collected operational risk loss data and classified the losses in terms of eight business lines and seven loss event […]