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- The Fundamentals of Operational Risk Management
The Fundamentals of Operational Risk Management

London Stock Exchange, London
Participants will gain an understanding of the fundamentals of operational risk in financial services, as well as focus on the core components of the Operational Risk Framework – Losses and Near Misses, Risk and Control Self-Assessments and Key Risk Indicators.
Course overview
Operational Risk discipline has developed and moved a long way since the years of being a ‘poor cousin’ of credit and market risk. With continued regulatory focus and catastrophic industry events, Operational Risk has become a crucial topic of the Senior Management’s agenda. This interactive, practical one day course will leave the delegates with a broad knowledge of how operational risk is defined and distinguished. Participants will gain an understanding of the fundamentals of operational risk in financial services, as well as focus on the core components of the Operational Risk Framework – Losses and Near Misses, Risk and Control Self-Assessments and Key Risk Indicators. Delegates will be also introduced to the challenging subject of Operational Risk Appetite. Participants will examine case studies of recent operational risk failures, review and become aware of the concepts of ‘impact and likelihood’ risk grading scales and have the opportunity to practice using them while identifying their ‘Top Risks’. The course will help the delegates understand why Operational risk remains high on the regulatory agenda; consider Basel Committee guidelines and compare the focus of PRA and FCA in the UK with other regulators globally.
Why attend?
Operational Risk remains high on the regulatory agenda. This interactive course provides an essential update for senior executives and risk and control professionals, allowing them to
- Understand how Operational Risk discipline has progressed over the years and why it remains in focus
- Review the approaches to building an effective Operational Risk Framework
- Structure a value-added operational risk identification and assessment program
- Understand how to integrate Operational Risk with Business Strategy
- Attain best practice in Loss data collection, RCSA and Key Risk Indicators (KRIs)
- Enhance loss data collection processes, incorporating latest Basel Committee requirements aimed at improving the quality of risk data
- Find meaningful ways to define an operational risk appetite
- Review case studies and practice through group exercises
- Interact with fellow practitioners and benchmark the maturity of their Operational Risk framework with peers
Who should attend?
This one-day course has been designed to appeal to the following professionals:
- Directors and senior executives
- Heads of internal audit, compliance and risk functions
- Operational risk managers
- Compliance officers
- Audit professionals
- Operations managers
- Governance and Control professionals
- All those individuals responsible for implementing best practice operational risk management practices in their organisation
CPD points: This programme attracts 6 CPD points
Course Agenda
8:30 - 9:00 Registration and Coffee
9:00 - 9:30 Welcome and Introduction
- Objectives for the course and participant’s expectations
- What is Risk? And how to help your employees think about Risk
- Operational Risk – definition and basics
- Group Discussion: Current regulatory, stakeholder and practitioners’ views on ORM • Building and Effective Operational Risk Management Framework
9:30-10:30 Operational Risk Events (Losses & Near Misses)
- Definitions and Examples – Losses, Near Misses, Gains
- Exercise: Are these Operational Risk events?
- Collection and analysis – process and challenges
- Basel Committee Loss Data Collection Study
- Impact of the recent regulatory developments – Risk Data Aggregation & Reporting
- Group Work: RBS Case Study
10:30-10:45 Coffee
10:45 – 12:30 Risk Identification and Assessment
- Risk and Control Self-Assessments – the concept and the question it raises
- Various approaches to conducting RCSAs – Process, Strategic, Hybrid
- Integrating Operational Risk with Business Strategy
- Risks: Impact and Likelihood
- Importance of Inherent and Residual risk
- Control assessment: judgemental evaluation or testing
- Exercise: assessing design and effectiveness of controls
- Group Work: identifying and rating ‘Top Risks’
12:30- 13:30 Lunch
13:30-15:15 Key Risk Indicators
- Key Risk and Key Control Indicators
- Various approaches to KRI identification
- Attributes of good indicators
- Exercise: practicing in defining the KRI and setting the thresholds
- KRI Dashboard in action
- Case study: UBS
15:15-15:30 Coffee
15:30-16:30 Operational Risk Appetite
- Different views - is there return-on-investment from taking Operational Risk?
- Expressing Operational Risk appetite using essential OR tools
- Group Study: evaluation of Appetite Statements expressed by peer banks
16:30 – 17:00 The OpRisk Wrap-Up
- Conclusions and thoughts on the future of Operational Risk
- Any remaining questions answered
- Building an individual Action Plan