Operational Risk
What is Operational Risk?
The risk of loss resulting from inadequate or failed internal processes, people, systems, or external events in day-to-day business operations.
Terms that appear alongside operational risk
Each of these is named in at least one of the same controls as operational risk. The number is how many controls name both.
- governance 13 shared controls
- resilience 12 shared controls
- compliance 12 shared controls
- business continuity 9 shared controls
- operational resilience 9 shared controls
- risk appetite 8 shared controls
- risk management framework 8 shared controls
- risk assessment 7 shared controls
Frameworks that govern operational risk
What the standards actually require on operational risk
Requirements naming operational risk across 6 standards, quoted from the control text.
The Board must make sure the entity sets out unambiguous roles and responsibilities for senior managers covering operational risk management, business continuity and service provider management.
apra-cps-230-operational-risk-management::20 · Para 20 Board ensures clear senior manager roles for operational risk, continuity and service providers →Management understands that operational risk from IT arises in back-office processing, customer service, systems development, internal controls and capacity planning across all lines of business and drives strategic risk from inaccurate information, compliance...
ffiec-it-examination-handbook::MGT-II.A · II.A Operational Risk (Management) →The bank must apply the operational risk definition covering losses from failed processes, people, systems or external events, including legal risk and excluding strategic and reputational risk (OPE10.1), and build the Business Indicator from the interest, lea...
basel-iii-international-banking-framework::OPE25 · Calculate operational risk capital with the standardised approach (BI, BIC and ILM) →Sets the supervisory approach to operational risk and the elements of effective management: an appropriate framework, risk governance (board oversight, senior management responsibilities, risk culture), the three lines of defence (business unit management, the...
hkma-spm::OR-1 · OR-1 Operational Risk Management →A process is planned, put in place and controlled for managing the operational risks that could stop applicable requirements being met. As fitting, it covers: who is responsible for managing operational risk;
as9100d-aerospace-quality-management-system::8.1.1 · 8.1.1 Operational risk management →The bank has an operational risk management framework and operational resilience approach considering its risk profile, appetite, business environment, tolerance for disruption to critical operations and emerging risks, with strategies, policies, procedures, s...
basel-core-principles-for-effective-banking-supervision-2024::P25 · Principle 25: operational risk and operational resilience →Questions people ask about operational risk
What is Operational Risk?
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