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Castor Panfilov
Castor Panfilov

Managing Operational Risk: Practical Strategies... ((INSTALL))


'Douglas Robertson has produced an exploring and comprehensive analysis of how operational risks that threaten financial institutions can be identified earlier and can be managed efficiently within a practical and realistic framework. This is an original book which is well-written for a popular as well as a professional readership.' Roland L. Gillet, Professor of Finance, Management School of La Sorbonne, University of Paris




Managing Operational Risk: Practical Strategies...



Most organizations accept that their people and processes will inherently incur errors and contribute to ineffective operations. In evaluating operational risk, practical remedial steps should be emphasized to eliminate exposures and ensure successful responses.


Two things are generally required to measure operational risk: key risk indicators (KRIs) and data. Measurement, however, can be especially challenging when organizations are unable to integrate all the diverse types of data required to understand the organization's operational risk. This might be due to the absence of software that enables the collection of data from different systems and the analysis of that data or to data silos erected by organizational fiefdoms, among other factors.


IMT 556 Information and Operational Risk (3)Examines the information dimensions of the most common types of operational risk including: internal and external fraud, regulatory noncompliance, processing errors, information security breaches, and technology failures; practical application of operational risk frameworks where the intersection of people, information, processes, systems, and external events can lead to financial loss.View course details in MyPlan: IMT 556


For today's financial institutions, Managing Operational Risk has the essential business tools to design optimal risk management programs and put your company well ahead of the curve in the face of anticipated new regulatory standards and capital requirements. This definitive book by an international expert covers every aspect of managing operational risk, including operational risk definitions, data collection, risk assessment, modeling, insurance, and risk finance, as well as a comprehensive introduction to information technology.


Information security is usually a top priority for the chief information officer (CIO). CIOs should ensure a top-down approach and culture to working toward information security within the organization. A practical way of initiating information security is for the CIO to work with the chief information security officer (CISO) to define a governance framework and then entrust the operational responsibility entirely to the CISO. In many organizations, CIOs lose technical focus due to the exponentially fast-changing technology landscape. The challenge they face is to approach the security landscape technically, convince the board of this approach, move the ISG from a cost center to a profit center and invest proactively. The ideal way to accomplish this is for the CIO to introduce a revenue model projecting the possible losses that may result from not making these changes, e.g., impacts of a security breach supplemented with a cost-benefit analysis.


  • Companies often gauge risk by determining whether it is highly likely, likely, possible, unlikely, or highly unlikely an event will occur. Highlight likely is often assigned a percentage of greater than 90%, while likely includes a range that is always above 50%. Management uses these percentages to determine the best course of action when evaluating the cost of mitigation against the cost of a detrimental outcome."}},"@type": "Question","name": "How Do You Identify Operational Risk?","acceptedAnswer": "@type": "Answer","text": "Operational risk is identified by assessing what could go wrong in the day-to-day aspects of a company. Management often identifies operational risk by asking questions such as "what if a certain system broke down?" or "what if a certain supplier was unable to deliver goods on time?". Management can come up countless areas of operational risk; it is up to them to decide which aspects are most important to mitigate and which to accept.","@type": "Question","name": "What Are the 4 T's of Risk Management?","acceptedAnswer": "@type": "Answer","text": "The four T's of risk management are:Tolerate: management decides they are okay with a certain operational risk and does not action to stop it.Terminate: management is not okay with any level of risk with a certain activity and decides to stop that activity.Treat: management puts in place certain maneuvers that decrease the potential total risk.Transfer: management wants to perform an activity but seeks a third-party to incur the risk on their behalf (i.e. buy insurance).","@type": "Question","name": "Who Is Responsible for Managing Operational Risk?","acceptedAnswer": "@type": "Answer","text": "Senior management is often responsible for managing operational risk by being aware of what risks are in place and the strategies for overcoming them. Though lower-level field managers are more involved in the day-to-day aspects, senior management should oversee their activities to make sure the operational risk strategies are being properly carried out."]}]}] Investing Stocks

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Senior management is often responsible for managing operational risk by being aware of what risks are in place and the strategies for overcoming them. Though lower-level field managers are more involved in the day-to-day aspects, senior management should oversee their activities to make sure the operational risk strategies are being properly carried out.


As an organization, you can't afford to leave your data security up to chance. The business impact could be astronomical, it could result in lost revenue, operational disruption, and stolen customer data. Data breaches also cause reputational damage that, in some cases, could take you out of business. So, with everything that's at risk, how can you reduce cybersecurity risk for your organization? Here are 10 practical strategies that you should implement.


Basel II and various supervisory bodies of the countries have prescribed various soundness standards for operational risk management for banks and similar financial institutions. To complement these standards, Basel II has given guidance to 3 broad methods of capital calculation for operational risk: 041b061a72


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