One of the most difficult things that a Chief Risk Officer (and the Head of Operational Risk Management) has to do is embed and entrench operational risk management. By contrast, implementing operational risk management is straightforward although a task that can take several years. It is also easy for a regulator to spot a firm that is simply the operational risk management in order to pass regulatory requirements. After all, supervisors have up to 20 firms that they supervise and they will be very familiar with the successful (and less successful) ways of managing operational risk.
The tools used in operational risk management (Risk and Control Self-Assessments; Key Risk Indicators; Event capture and analysis; and, Scenario and stress testing analysis) each have their own business benefits and we discuss these within this whitepaper.
