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To keep you ahead of the latest market developments, Info World has created this practical course, which will explore the techniques to review, manage and account successfully for operational risk. Hands on and case-study-based, this course will provide delegates with a whole set of tools to design efficient internal control mechanisms that help to prevent mismatching of trades and tracking errors. It will also illustrate how to apply data integration methods to centralize and clarify management information systems.

Learning Outcomes

·Gain a unique practical insight into mitigating, reducing and avoiding enterprise-wide operational risk in financial institutions.

·Identify and define the boundaries of operational risk

  • Understand specific risks in financial institutions and their impact on operational efficiency
  • Examine some of the models
  • Identify solutions and tackle line management, internal control and the effect of human error
  • Implement IT solutions to mitigate operational risk



Understanding Operational Risk

Factors influencing the importance of operational risk

  • Market consolidation and margin squeeze
  • The complexity and sophistication of IT systems
  • Regulatory and risk capital allocation pressures
  • Hidden risks posed by complex financial products
  • Improved communications and reliance upon efficient IT systems and STP

Identifying and classifying operational risk categories

  • Fraud
  • Systems and operations
  • Communication
  • Documentation


Analysing Specific Risks


  • Systems failure
  • Programming errors
  • Telecoms

Participants will be required to identify and manage operational risk in a problem with a system implementation


  • Incompetence
  • Fraud
  • Key person
  • Performance
  • HR risks

Participants will be required to identify and manage operational risk in a personnel issue


  • Execution error
  • Record keeping errors
  • Transaction and mis-matching of trades
  • Accounting risk
  • Procedure failures

Participants will be required to identify and manage operational risk in a process issue

Governance & controls

The market crash and liquidity issues that surface focusing attention on the governance and control standards in financial and corporate institutions

It is essential to establish an adequate structure to meet this requirement for higher standards in operational risk management

Developing an operational risk management framework

  • Objectives of operational risk management
  • Responsibilities
    – developing a risk awareness culture
    – developing operational risk management procedures
  • Operational risk management techniques
    – self assessment
    – benchmarking effectiveness of controls
    – allocating operational risk costs
    – awareness of the impact of and adherence to directives such as Basel, MiFID, AIFM etc

Case Studies

How did some of the key industry events happen and what were the operational risk management failures?

Measuring Operational Risk

Being able to identify the risk and react to a risk event in a controlled and effective way is crucially important.

In this session we look at the methodology used to identify the risk and its characteristics as well as how to manage the risk event and the post event environment.

Understanding the risk impact

  • What is measured and how
  • What not to measure
  • The interpretation of information
  • Incident Reports
  • Capital allocation assumptions
  • Lessons Learned and taking positives from risk events

Utilizing risk measurement techniques

  • What type of practical measurement techniques are there?
  • How do KRIs and KPIs work?
  • Self Assessment Techniques

Analysing a major risk situation Working in teams Participants will be presented with scenarios that is occurring in:

  1. a financial institution
  2. a corporate business

The teams tasks will be:

  1. Establishing the risks, risk events that have or are about to happen and analysing the risk profile faced by the firm
  2. Analysing incident reports and management information to establish the creditability of the control process
  3. Creating a road map of the potential causes of the risk situation
  4. Creating a road map for the lessons learned from an event
  5. Creating a set of suggestions for the business to follow to resolve the risk situation
  6. Prepare a list of the commonalities and differences in the operational risk

Analysing a situation

  • Identifying potential risks
  • Identifying killer risks
  • Identifying the cause of the risk situations
  • Devising the recovery plan

Managing and Implementing the Operational Risk Management Policy

Generic approaches

  • Do nothing
  • Insurance
  • Risk profiles mapping
  • MIS
  • Straight Through Processing (STP)
  • Processes and controls
  • Overcoming data incompatibility
  • Systems reconciliation

Soft issues

  • Building risk awareness culture
  • Building consensus on risk allocation policies
  • Building sense of responsibility for risk reduction
  • Overcoming resistance to change and establishing clear, straight-through communication channels
  • Corporate governance

Identifying and tackling line management issues

  • Assessing the level of senior management buy-in to operational risk solutions
  • Understanding reporting lines and roles/responsibilities
  • Implementing effective management control
  • Empowerment and staff control

Participantswill be required to identify and manage operational risk in a problem with a system implementation

Participants will be required to identify and manage operational risk in a personnel issue

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