Banks seek a single oprisk software solution

Recommend action plans to modify controls or define new controls as part of the issue remediation process. Monitor the status of the implemented actions at every stage and track them to closure. Define multiple operational risk parameters and calculations rules. Enable advanced risk quantification, analytics, and modelling. Quantify risks into monetary value. Access real-time information through role-based landing pages with graphical dashboards to stay on top of operational risks.

Leverage loss data analytics reports and dashboards to understand root causes, total loss exposure, and optimize your ORM program. Additionally, it has the capability to integrate with several third-party content providers such as RiskSpotlight, UCF using APIs to pull data into the system.

It enables simple assessments by rating risks, and advanced assessments using multiple parameters and risk scoring to meet variations in risk assessment methodologies across business units, regions, and products. Also, the tool helps you assess the overall control environment based on multiple factors. You can aggregate risk scores using a weighted average method where weights can be given to multiple dimensions including organization, objective, product, process, assessable item, or risk hierarchy for improved and accurate risk visibility.

Risk assessment and computations are based on configurable methodologies and algorithms for inherent impact and likelihood. Risk assessment criteria include impact, likelihood, controllability, and other determinants as well as weight-based assessments of risk criteria values for use in combined valuations. In compliance with the Basel Accords, you can capture and categorize internal risk events and losses across multiple impacted organizations.

Faster loss data recording with a simplified and easy-to-use interface is enabled for frontline users to record basic details of a loss event. Multi-currency risk events can be aggregated in a single currency. OpRisk Global is the only interactive, peer-led global discussion where you can benchmark, share and gain insights on how to best sustain your operational risk resilience framework in anticipation of future events and evolving regulatory expectations.

Learn how to strengthen your resilience and gain practical takeaways from the leading international financial firms and regulatory bodies driving best practices. What are the emerging risks that should be on your radar? We will discuss the threats from the known unknowns, and the rapidly evolving risks you cannot ignore.

We bring together the largest, most global community of senior OpRisk professionals so you can actively benchmark whilst better understanding your full ecosystem of risk. The pandemic put our lives on hold, now is the time to connect with like-minded operational risk professionals from across the globe and get the answers you need in peer-led discussions.

Take a look at the agenda. If you have any questions or comments about OpRisk Global , please contact the appropriate team member below:. EMAIL: [email protected]. We seek to help companies anticipate, prepare, respond, and learn in any situation by equipping them with the software solutions they need to be successful.

Visit fusionrm. The first AI-powered platform for eliminating multi-party, multi-factor risk from 3 rd , 4 th to nth tier parties, Interos automates discovery, detection, and response to financial, operations, governance, geographic, and cyber risk.

MetricStream is the global market leader of Integrated Risk Management and GRC empowering organizations to accelerate growth with risk-aware decisions. The MetricStream Platform and solutions provide quantifiable risk insights powered by deep domain expertise, embedded content, collaboration, integrated data, analytics, and AI.

We connect governance, risk management, and compliance across the extended enterprise with business objectives, enabling our customers to thrive on risk. For details please visit: www. Linklaters is a leading global law firm, supporting and investing in the future of our clients wherever they do business. We combine legal expertise with a collaborative and innovative approach to help clients navigate constantly evolving markets and regulatory environments, pursuing opportunities and managing risk worldwide.

Notes to Editors For PR related questions, please contact: connect acin. About Acin Acin is the leading risk and control data standards, benchmarking and controls data analytics company. Share this. Share on facebook. Share on twitter. Share on linkedin. After completing this reading you should be able to: Describe the seven Basel II event risk categories and identify examples of operational risk events in each category.

Summarize the process of collecting and reporting internal operational loss data, including the selection of thresholds, the timeframe for recoveries and reporting expected operational losses.

Explain the use of a risk control self-assessment RCSA and key risk indicators KRIs in identifying, controlling and assessing operational risk exposures. Describe and assess the use of scenario analysis in managing operational risk and identify biases and challenges that can arise when using scenario analysis. Compare the typical operational risk profiles of firms in different financial sectors.

Cause-driven classification: the risk classification is based on the reasons that cause operational losses. Impact-driven classification: the risk classification is based on the financial impact of operational losses. Even-driven classification: risks are classified based on OpRisk events as outlined by the Basel Committee.

It is by the far the most common classification approach. EDPM is further split into 6 level 2 categories. CPBP is further split into 5 level 2 categories. Setting a Collection Threshold and Possible Impacts Under Basel II regulations, financial institutions are allowed to select a loss threshold for loss of data collection. Near Miss The firm may be allowed to consider recoveries only in situations where it is possible to rapidly recover loss events.

Time Period for Resolution of Operational Losses OpRisk events are usually complex and often have a large time gap between inception and final closure.

Provisioning Treatment of Expected Operational Losses In a bid to have guidelines that firms can follow when dealing with OpRisk, accounting standards have been developed. IAS37 establishes three specific applications: For future operating losses, a provision cannot be recognized because there is no obligation at the end of the reporting period; For an onerous contract — a contract in which the unavoidable costs of meeting its obligations exceed the expected economic benefits — a provision should be recognized.

According to IAS37 the amount of the provision should not be reduced by gains from any of the following: Expected disposal of assets even if the expected disposal is closely linked to the event giving rise to the provision , Expected reimbursements arising from, for example, insurance contracts or indemnity clauses.

Reimbursements received post-settlement should be recognized as a separate asset. A RCSA program is developed in three main steps: Step 1: Identification Managers identify and assess inherent risks by making no inferences about controls embedded in the process. During this process, managers seek to establish: Risk scenarios, i. Correlation to other risks. The manager seeks to establish whether a failure in one area could bring about failure in another aspect of the firm. Step 2: Adding controls Managers then re-assess risk in the presence of controls to establish how effective thee controls are at mitigating risk.

Step 3: Control tests Managers then embark on a control testing process to assess how effective the controls in place mitigate potential operational risks. If risks are controlled within tolerances thresholds that ae set too high, the framework may give managers a false sense of security.

Managers may not divulge information freely if they feel they are culpable or the risk is out of control. Key Risk Indicators Key risk indicators seek to identify firm-specific conditions that could expose the firm to operational risk.

Examples of KRIs include: Staff turnover Number of vacant positions Number of failed transactions over a specified time period Percentage of employees that take up the maximum leave days on offer. The use of Scenario Analysis in Managing Operational Risk Scenario analysis is the process of evaluating a portfolio, project, or asset by changing various variables.

The Delphi Concept As we have established, scenario analysis relies heavily on opinions gathered from experts. This poses a set of challenges: There may be no precise analytical technique to model the subject matter of the process, but through an iterative process, it may be possible to narrow down on the most compatible solution.

Individuals involved in the process may have different backgrounds in terms of experience and expertise, and their opinions may have significant divergence. Frequent group meetings or workshops may prove costly and time-consuming More individuals are needed than can effectively interact in a face-to-face exchange The Delphi technique can solve all of these issues.

But what exactly does it stand for? Each expert returns their initial forecasts and justifications. These OpRisk manager then compiles the responses and sends out feedback to everybody. This step may be iterated until a satisfactory level of consensus is reached. Typical Operational Risk Profiles of Firms in Different Financial Sectors Large financial institutions are usually made up of a number of business lines that have different OpRisk profiles. Retail Banking The OpRisk profile of retail banks bears a lot of semblance to that of the retail brokerage; External fraud constitutes the highest frequency of OpRisk events that tend to happen on a daily basis.

Asset Management In the years leading up to the financial crisis of —, Asset Management firms enjoyed steady increases in assets under management AUM. Common OpRisk events include: Errors in processing transactions; system failure that can cause severe damage and impact the balance sheet of the asset manager; and Legal Suits initiated by clients for poor performance Consistently failing to comply with local regulations, or with very basic business ethics Failure to comply with local regulations or basic business ethics can bring about large operational losses and serious reputational damage.

Retail Brokerage Generally, risk profiles tend to vary significantly between institutions because each institution adopts its own unique business strategies. A Note on Insurance Business Compared to other business lines, insurers are still in the early stages of the development of their OpRisk frameworks.

The Role of Operational Risk Governance Governance and organizational design play a critical role toward the development and success of an OpRisk framework at a firm. Design 3: Solid Reporting Lines to Central Risk Management In this structure, risk managers still maintain a physical presence in the business units but report to the Central Risk function, usually based in the headquarters. Design 4: Strong Central Risk Management This design is built around the central chief risk officer who is in charge of risk management across the firm.

Practice Question As a manager of an organization, it is important to ask yourself questions during risk control self-assessment.

Risk scenario: Where are the potential weak points on each of these processes? Exposure: How big a loss could happen to my operation in the event of a failure? Delivery: How can we better handle customer delivery?

The correct answer is C. Asking questions on different risk scenarios and exposure is necessary for combating risk likely to occur: Risk scenario: Where are the potential weak points on each of these processes?

Featured Swaps. Subscribe to our newsletter and keep up with the latest and greatest tips for success. Our videos feature professional educators presenting in-depth explanations of all topics introduced in the curriculum. Professor Forjan is brilliant. He gives such good explanations and analogies. And more than anything makes learning fun. A big thank you to Analystprep and Professor Forjan.

Watching these cleared up many of the unclarities I had in my head. Highly recommended. Every concept is very well explained by Nilay Arun. Crisp and short ppt of Frm chapters and great explanation with examples. Trustpilot rating score: 4. Next Post Stress Testing Banks. Jan 16, Intraday Liquidity Risk Management After completing this reading, you should be able to: Identify and explain the