Operational Risk


"EU legislation requires that institutions adequately manage and mitigate operational risk, which is defined as the risk of losses stemming from inadequate or failed internal processes, people and systems or from external events. Operational risk includes legal risks but excludes reputational risk and is embedded in all banking products and activities. It has always existed in banking, and non banking, organizations but it has acquired a greater relevance given the increased complexity and globalization of the financial system and the recent materialization of unprecedented extremely large losses." - EBA European Banking Authority

Operational Risk has now become a dedicated risk category in Pillar 1 of the Basel II Framework.  It has been apparent int he past that when Banks consider Operatinal Risk they generally focus on regulatory compliance but could have overlooked other aspects of operational risk management (ORM).  These often included the bank’s risk culture and risk appetite, and a risk focus in day-to-day business decisions.

However, post 2008 the Banks have become accutely aware that a well-structured and efficiently run operational risk management approach offers them many benefits as well as safeguards .  When Bank put in the correct and appropriate processes and controls they can free up capital, make better decisions, lower the cost of funds, lower operating costs, decrease profit and loss volatility.  

These days bBnks would be foolish to downplay the magnitude of risks associated with lost income opportunities, reputational issues and credit defaults caused by unforeseen operational risk events.

Here at Albany Beck we aim to make such losses through poor Opertional Risk employees a thing of the past!  Please see below the areas we cover in thsi aspace and do not hesitate to make contact whether you are a candidate looking to build on your career or a client looking to strengthen your internal frameworks and control.

  • Operational Control
  • Business Risk Management
  • Business Continuity Management
  • Oversight Management
  • Conduct Risk Management
  • Change Management
  • Enterprise Risk
  • Risk Governance