Operational Risk Management
Operational risks are risks that every organization confronts. Generally, an operational risk is a risk that comes about from a company's execution of its business functions. The term operational risk is typically a broad term and includes some of the following; fraud risks, legal risks, physical or environmental risks. More specifically, operational risk can be defined as the risk of loss or incident resulting from insufficient or unsuccessful internal processes, people and systems, or from external events.
The European standard Basel III is a good example of how operational risks can be defined. It states that risk management is made up of credit, market and operational risk management. Credit and market risks are managed and mitigated by an organization’s financial department, but operational risk management is most often coordinated centrally at the company, and each department or operational unit is guided in their implementation; for example the HR department may manage personnel safety risk under the guidance of the enterprise.
Operational Risks under control
It can be difficult to manage the various risks across an organization’s departments, and in some cases the various regions it operates in. The BWise solution can track, trace and manage all of the various risks an organization must manage under operational risk, leading to a reduction in the associated costs of those risks. Risks can be entered into the BWise solution by each department, and Internal Auditors can request risk assessments and surveys from individuals throughout the organization about those risks in the same solution. In fact, the departments throughout the enterprise will use the same system to manage and mitigate those risks, leading to less overhead, and time and cost efficiencies. Lastly, reports on risks, for example heat maps, can also be generated in the BWise solution for executives and managers. Operational risk information can even be used automatically to generate dashboard views for risk managers.
Benefits using BWise for ORM
With proper operational risk management in place, investments can be made with more assurance, risk levels can be lowered or at least better understood, and overall costs can be much reduced. In order to make these Operational Risk Management duties actionable and truly beneficial, BWise provides a full risk management solution that includes risk assessments, a loss and incident database, dashboards and reporting, and a full risk analysis module that includes heat maps, Monte Carlo simulations and distribution analysis.
Interested in how to reduce your operational risks and overall costs with BWise Risk Management? Contact us.