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 categories. The 7 loss events are further categorized into 20 sub categories. The eight business lines and the seven types of risk are listed below: