Operational Risk

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

Course Highlights

Getting together with other people within the area and focusing on operational risk for two days. Inspirational! Linking technology, personnel and processes together. Not forgetting the big picture, good!

M.J., SEB

In just two days you will learn:

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

For details of the course trainer, please download the course brochure

Booking Information

Dates	Prices	Book This Course	Discount
04 - 05 Oct 2010	£ 1999		-
02 - 03 Jun 2011	£ 1999		-

Course Programme

M.J., SEB

I liked the content, the speaker and the material

Eduardo Gonzales, Risk Controller, Philips Int'l

The course was informative and relaxed

C.J.W. Blackmore, Head of Quality Assurance, American Express

WHAT IS OPERATIONAL RISK?

Factors Influencing the Importance of Operational Risk

Market consolidation and margin squeeze
The complexity and sophistication of IT systems
Basel II 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

Technology

Systems failure
Programming errors
Telecoms

People

Incompetence
Fraud

Process

Execution error
Booking error
Transaction and mis-matching of trades

Workshop: Developing operational risk management

Objectives of operational risk management
Responsibilities
developing a risk awareness culture
developing operational risk management procedures
Operational risk management techniques
self assessment
benchmarking
allocating operational risk costs

MEASURING OPERATIONAL RISK

Understanding the Risk Impact

What is measured and how
What not to measure
The interpretation of information
Capital allocation assumptions
Capital adjustment policies

Workshop: Utilising risk measurement techniques

Case Studies: Rogue trading and fraud

Practical Workshop: Identifying and managing operational risk in a merger scenario

Stage 1: Understanding how the new operational risk environment might look

Covering the period after the offer announcement
Systems map and assessment
Take-over rules - ensuring information security

Stage 2: Understanding the new operational risk environment

Covering the period after the offer is agreed
Matching of people
Matching of systems
Assessing how the support function will work

Stage 3: Living with the new operational risk environment

Short-term - surviving the first few months
Making the two firms work
Getting the systems to communicate and work in tandem
Living with multiple back-office and front-office systems
Living with multiple processes
Politics
Dealing with resentment, dismissals/ redundancies

Stage 4: Designing and building a better operational risk environment

Longer-term - integration and rationalisation
Process re-engineering and streamlining processes
Removing duplication
STP projects
Systems design and end-user considerations
Si ngle back office and front office
Overcoming resistance and introducing training strategies
Project planning, budgeting and communications
Assigning responsibility for risk policy

Exercise: 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

Practical Workshop: Delegates will be required to identify and manage operational risk in a problem with a system implementation

Practical Workshop: Delegates will be required to identify and manage operational risk in a personnel issue