The growing importance of operational risk in the banking sector has promoted a step for change in the way
it is managed. The backward looking approach has been replaced by a forward-moving culture in which operational
risk is managed in a proactive and strategic way on an organization wide basis.
The key drivers for increased focus on operational risk include the following:
One of the most powerful arguments for strengthening operational risk management is the size of modern day regulatory fines. Penalties for operational failure have reached a level where they are having a material impact on firms’ profitability which promotes a strong operational risk process as an integral aspect of governance across the organization. In addition to the growing complexity of modern banking operations and ever increasing number of IT systems, it is clear that banks now require a full picture of operational risk exposure across all fragmented operations.
The main motivator for an increased focus on operational risk is banks’ desire to rebuild reputations. Post financial crisis, regulators and politicians continue to increase their grip on the industry which results in a strong incentive for firms to evaluate their current operational risk management approach. They would be well advised to put in place an organization-wide framework that will not only prevent failures from occurring but also provide evidence to regulators that appropriate controls are in place.
Operational risk management is an integral function of any financial service organization. It is aimed at fostering a risk aware culture into people, processes and systems in the organization. As an essential ally and aide to the senior management, operational risk management creates a balance between risk and rewards in the organization therefore delivering maximum value for stakeholders. valoores in'Operational Risk helps enable senior management promotes this new culture while complying with strict regulatory requirements.
- A simple to use, comprehensive out-of the-box solution helps financial institutions quickly adopt and practice effective enterprise GRC
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- Central libraries for risks, controls, key indicators and compliance for data integrity and consistency
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