Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

What is operational risk?

user-image
Question added by manana makhubu
Date Posted: 2016/05/09
TARA SHERIGAR
by TARA SHERIGAR , Manager Operational Risk, Compliance , ICICI BANK LTD

Operational risk is:

"The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events."

Priscilla Schelp
by Priscilla Schelp , PhD Researcher, Leadership and Management - Risk Management , Cranfield University - Cranfield School of Management

Operational Risks can be seen as risks that can cause losses due to inadequacy / failure of internal processes, systems or people. Therefore, the actual risks depend very much on the nature of organisation you look at: Do you look at a profit making or a non profit organisation for example. Within the profit making organisations, there is a big difference between the risks of corporate organisations and risks of financial sector organisations. For Operational Risk you often find definitions by the respective regulating authorities. You may have a look at the Basel III definition of Operational risk.

By the way: Ops risks can include IT risks, however often IT risks are managed separately.