What is operational risk and how can it be managed?

What is operational risk and how can it be managed?

Operational risk refers to the potential for loss resulting from inadequate or failed internal processes, people, and systems, or from external events. It can be managed through risk assessment, implementing controls, and continuous monitoring.

Can you give me some examples of operational risks?

Sure! Examples include system failures, fraud, compliance breaches, and natural disasters affecting business operations.

How can technology help in managing operational risk?

Technology can help by automating risk assessments, improving data analysis, enhancing communication, and providing real-time monitoring of operations.

What are the key components of an operational risk management framework?

Key components include risk identification, risk assessment, risk control, risk monitoring, and risk reporting.

What regulations should companies be aware of regarding operational risk?

Companies should be aware of regulations like Basel III, Sarbanes-Oxley Act, and industry-specific guidelines that address operational risk management.