Course Description
The financial industry is highly exposed to many types of risks, in most cases those risks are very inherent in nature i.e. risks cannot be avoided, to the best they could be managed, in this way financial industry is truly in the risk taking business.
In addition to traditional risk types, e.g. credit, market & liquidity risks, financial institutions are also exposed to operational risk; many argue that such exposure is much more than the other traditional risk types. Identifying and measuring/assessing drivers for operational risk is quite challenging since operational risk losses typically manifest themselves in the credit, market or liquidity risk profiles, this is in addition to the inherent complexities of the quantification of operational risk drivers, e.g., people, process & control failures due to the qualitative nature of such risk drivers.
This training course is designed to overcome these challenges as well as attempting to provide participants a complete operational risk management cycle on modeling operational losses, explaining the development process for Key Risk Indicators (KRIs), and clarifying the Risk-Control Self-Assessment (RCSA) processes all in line with the latest operational risk management industry best practices & international standards including Basel & regulatory requirements.
Course Objectives
- Mastering the "Operational Risk" conceptual framework
- Developing participants' abilities to drill down Operational Risk drivers & factors
- Drilling down operational risk process
- Explaining operational risk components & methods for modeling operational loss incidents & key risk indicators
- Mastering the Risk-Control-Self-Assessment (RSCA) process along with real bank examples
- Explaining latest banking industry approaches & trends with respect to managing operational risk
Who Should Attend?
- Risk Management Staff Members
- Internal Audit Officers
- Financial Control Officers
- Basel Implementation Officers
Course Details/Schedule
- Term definitions
- Operational risk types & sub-types
- Detailed operational risk classifications
- Components of operational risk framework
- Internationally recognized principles for sound operational risk management
- Operational risk management process
- Why operational risk should be managed?
- Risk Models vs. Model Risks
- Risk Models
- Qualitative Models (Scorecard; SC)
- Quantitative Models (Loss Data Approach; LDA)
- Hybrid Models (Scenario-Based Analysis; SBA)
- Operational loss data (OLD)
- Definition & attributes
- Reportable OLD
- OLD template
- Key Risk Indicators (KRIs)
- Definition & attributes
- KRIs development process
- Monitoring & escalation
- Documenting KRIs
- Risk-Controls Self-assessment (RCSA):
- Definition & attributes
- Modeling RCSA process overview:
- Monitoring & escalation
