Operational Risk Management - 2081 Words

Operational Risk Management Operational Risk Management, otherwise known as ORM, is defined as a continual recurring process which includes risk assessment, risk decision making, and execution of risk controls, which results in acceptance, mitigation, or avoidance of risk. It is the oversight of operation risk, which is a risk arising from execution of a company’s business functions. It is a very wide concept which focuses on the risks arising from the people, systems and processes through which a company operates. It also includes other categories like fraud risks, legal risks, physical or environmental risks. As for ORM, some include the risk of loss resulting from insufficient or failed internal processes and systems; human factors;†¦show more content†¦It is an expressive list of the threats that currently affect the organization with estimates of probability. The latter identifies weaknesses in the business that allow threats to spread with great disruptive effect. The assessment combines impact analysis and probability data to prioritize the plugging of gaps, proposing, cost-justifying and comparing strategies for improvement. Then we have what is called â€Å"continuity planning† which offers the ultimate backstop where risk improvement measures have known to be unsuccessful or were unsuitable and the organization faces great disaster. It identifies what people, processes, systems, and other structures must be provided to the firm in good time to guarantee and preserve its ability to exist. Last but not least, we have â€Å"assurance†, which is nothing but a set of activities that help guarantee that your continuity provisions work. Training encourages staff to build up a consistent understanding of risk and continuity issues , building familiarity with aspects that could affect them. Periodic review or audit ensures your continuity provisions still reflect the needs of the business. Preparation and testing offer controlled means of simulating real incidents, ironing out problems under safe conditions In addition to this, both the U.S. Department of Defense and the U.S. Navy have come upShow MoreRelatedOperational Risk Management50825 Words   |  204 Pages≈√ F M A G u i d e l i n e s on Operational Risk Management These guidelines were prepared by the Oesterreichische Nationalbank in cooperation with the Financial Market Authority Published by: Oesterreichische Nationalbank (OeNB) Otto-Wagner-Platz 3, 1090 Vienna, Austria Austrian Financial Market Authority (FMA) Praterstraße 23, 1020 Vienna, Austria Produced by: Oesterreichische Nationalbank Editor in chief: Gà ¼nther Thonabauer, Communications Division (OeNB) Barbara Nà ¶sslingerRead MoreOperational Risk Management2610 Words   |  11 PagesCORPORATE RISK MANAGEMENT ASSIGNMENT OPERATIONAL RISK MANAGEMENT (ORM) IN BANKS Risk is inherent in any walk of life in general and in financial sectors in particular. Till recently, due to regulated environment, banks could not afford to take risks. But of late, banks are exposed to same competition and hence are compelled to encounter various types of financial and non-financial risks. Risks and uncertainties form an integral part of banking which by nature entails taking risks. There areRead MoreWhat Is Operational Risk Management, Kri And Kpi?1548 Words   |  7 PagesIntroduction 1.1 What is operational risk management, KRI and KPI? Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems or external events where strategic, systemic and reputation risk are not included. 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With globalization and deregulation of financial markets, increasedRead MoreScenario Analysis for Basel Ii Operational Risk Management2572 Words   |  11 PagesBASEL II OPERATIONAL RISK MANAGEMENT 1 Introduction: Scenario Analysis for Potential Catastrophic Losses 1 2 Addressing Operational Risk 3 3 Scenario Analysis in a Risk Measurement Framework 5 4 Scenario Analysis in a Risk Management Framework 6 5 Achieving Risk Measurement and Management 6 6 Conclusion: Benefiting from Scenario Analysis 7 1 Introduction: Scenario Analysis for Potential Catastrophic Losses â€Å"Are you saying that you want us to figure out how to lose R50 million?† asked the risk managerRead MoreThe Department Of Defense s Operational Risk Management Essay1590 Words   |  7 PagesFurthermore, it will look what types a factors should be looked at when making an organizations plans. In addition, this paper will look at mitigating risks, specifically cyber and physical risk mitigation and some of the different approaches risks can be mitigated. Finally, this paper will briefly look at the Department of Defense’s Operational Risk Management process and how it ties planning and mitigation together. Planning Continuity of Operations Continuity of Operations (COOP) is an effort withinRead MoreMarketing Management : Strategic And Operational Risks727 Words   |  3 PagesMarketing management consists in distributing resources in order to produce net present value to shareholders among an environment of market-product investment involving risks. A. Rappaport, 1981). As a result, a marketing strategy is defined as the method on how the organization’s resources are put at risk seeking to get competitive advantages (V. Cook, 1983). Marketing risks are present in all the aspects of the marketing plan. We can identify five main areas of risks listed below: - StrategicRead MoreOperational Risk Management in Foreign Exchange Dealing710 Words   |  3 PagesOperational Risk Management in Foreign Exchange Dealing Abstract This paper discusses operational risk management in foreign exchange dealing for commercial banks in Tanzania. The paper further defines the problem and showing evidence that the problem is still in existence and outlines areas that require further researches from other literatures with the same research problem. It outlines the questions to be used in the research and shows the relevance of the study and its significance to commercialRead MoreCapital Adequacy and Risk Management in Banks1498 Words   |  6 PagesADEQUACY FRAMEWORK AND RISK MANAGEMENT IN BANKS GUEST LECTURE: MR. R M PATTANAIK EX GM- INDIAN OVERSEAS BANK CAPITAL ADEQUACY RATIO  (CAR) Also known as  Capital to Risk (Weighted) Assets Ratio  (CRAR)  is the  ratio  of a  bank’s capital  to its  risk.   National regulators track a banks CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory capital requirements. It is a measure of a banks capital. 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