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Operational Risk

The fundamentals of operational risk

Cash Sweep Modelling and Error Checking Techniques Course

A three-day course

  • Share the experience of a trainer who has been involved in operational risk for over 25 years
  • Up to date on major operational events, giving an insight into how they can be avoided
  • Covers the latest regulatory changes and their impact on operational risk management
  • Includes the top 10 operational risks concerns banks have had in the last 12 months
  • Prepares attendees for the impact on operational risk from the new technology driven financial products being developed over the next few years
  • The course has been delivered to many banks and financial institutions around the world

  • What operational risk is and why it is managed
  • The regulatory requirements
  • The activities in managing operational risk
  • The identification and self-assessment process
  • Managing operational risk events
  • The new regulations and their impact on operational risk management
  • Monitoring and reporting
  • The use of internal and external data
  • The development and use of key risk indicators

Day One 

What does operational risk really mean and why does it really matter

  • What does operational risk really mean?
  • Defining the scope of operational risk
  • Operational risk terminology
  • Operational risk types
  • Types of loss – financial, regulatory, soft
  • Risk Appetite
  • Case study 

Drivers of Operational Risk management

  • Why manage operational risk?
  • The Basel II Accord – Regulatory Drivers
  • Calculating Operational Risk capital
  • Case Study
  • The Basel III changes
    • Impact of the new SA on capital
    • Impact of the new SA on management
  • Other cross-border 

Operational risk management

  • Operational risk management activities
  • The operational risk framework
  • What falls under operational risk management?
  • Where does the ORM team fit in an organisation?
  • The three lines of defence
  • Adopting standards
  • The main challenges
    • IT Stability
    • Cyber Crime / Date Security
    • Anti-money laundering, counter-terrorist financing & sanctions
    • Tax & FATCA
    • Conduct risk
    • Case study
  • Strategic operational risk management – governance
  • Case study

Day Two 

Risk identification & Assessment

  • Risk logs/registers
  • Identifying operational risks
  • What are Risk Control and Self Assessments?
  • Are RCSAs useful – what is their real value?
  • Questionnaires vs. workshops
  • The psychology of RCSAs
  • Case study
  • Industry sound practice
  • Risk identification, causes and classifications
  • The challenges of implementing effective controls 

Loss data

  • Why collect operational risk data?
  • Implementing a loss database – database technology
  • Loss data content
  • Case study
  • The challenges of internal loss data.
  • Defining gross loss
  • Which reference date?
  • Case study
  • The new Internal Loss Multiplier and Loss Data Collection
  • External loss data
  • Case study 

Building scenario analysis and stress testing

  • Sensitivity analysis vs. stress testing vs. scenario analysis
  • Scenario analysis – uses
  • Developing credible scenarios – fact or fiction?
  • Multiple event scenarios and dependencies
  • Building scenarios and stress tests
  • Learning from past events
  • Key issues of scenario analysis

Case study: building a realistic scenario – what is reasonable?

  • Including stress and scenario testing results in capital calculations

Day Three

Mitigating operational risk

  • What is operational risk mitigation?
  • What are inherent and residual risks?
  • Mitigation techniques
    • People
    • Technology
    • Processes
    • External events
  • Identification of key controls

Case study: identifying appropriate mitigating techniques

  • The challenges of implementing effective controls 

Op risk events and their management

  • Event management
  • Event reporting
    • Internal
    • External
    • Managing reputational risk
  • On-going monitoring
  • Exercise 

Operational risk monitoring and reporting

  • The reporting process
    • Types of reports
    • Thresholds & escalation
  • What gives a report value?
  • Monitoring operational risk
  • Key risk indicators
    • What are KRIs?
    • The role of effective KRIs
    • Types of KRIs
    • Developing and designing key risk indicators
    • Case study
    • Evaluating KRIs
  • Business continuity planning vs. Disaster planning 

What Next?

  • What are the problems in practice?
  • The ‘use test’
  • What next – future flashpoints?

The trainer is a senior risk management consultant and trainer who specialises in operational risk, risk regulation, financial crime compliance and corporate governance. He is also an accomplished soft skills trainer. He is a senior-level operation and risk professional with more than 30 years’ experience which includes being a Chief Operating Officer and IT Director in a major UK bank. He is a pioneer of risk technology having implemented one of Europe’s first risk data ‘warehouses’ in the mid-1990s.

His career began at British Petroleum in 1985, where he spent three years as an analyst programmer. He then spent a further three years as a technical support engineer before joining Barclays Bank in 1991 staying for over eleven years. After starting as a systems manager in Europe’s largest currency dealing room and subsequently a director of IT, he was made Chief Operating Officer of the corporate bank treasury department in 1998. There he was responsible for all operations and IT of a dynamic global market and interest rate risk management business function located in seven different countries. He took charge of operational risk, planning, IT strategy, governance, project management, development, infrastructure, service delivery, budget and human resources. He became the systems and operations director of the group treasury department in 2000, where he was responsible for the management of all technology, infrastructure, development, operational risks and support of a front / middle office mission-critical business. In addition to treasury / market risk management, this business undertook trading, capital management and liquidity management activities. He became a freelance trainer in 2002, working on assignments within the banking and finance industry.

He is now an experienced commercial trainer known for his practical know-how and hands-on approach, with the ability to communicate complex issues effectively. He has provided consultancy services and training around the world, working with central banks, banks, professional associations, training companies and consultancy firms in Europe, Eastern Europe, Africa, the Middle East, Asia and the Far East. He is the author of several international risk management qualifications.

Operational risk is one of the few risks which affect all business functions irrespective of their activities or environments. As such all business managers and team leaders have a responsibility for understanding the operational risks within their business and ensuring that they comply with their organisations policies. They are also expected to understand and implement policies and procedures which minimise the risk and to manage events when they occur. These techniques cover a multiple of disciplines ranging from people management through to data protection, many of which can improve business efficiency.

This Operational Risk Course is designed to explain the fundamentals of operational risk, what it is and why it is managed, the identification and assessment process, techniques for its mitigation and management and the monitoring and reporting process.


This seminar is designed for the front, middle and back office business functions of banks. It is intended for:

  • business managers and team leaders who have responsibility for ensuring the business function complies with their organisations operational risk policies
  • individuals who are responsible for implementing their organisations operational risk policies
  • individuals who are responsible for operational risk monitoring or reporting
  • risk managers
  • internal and external auditors who wish to gain an understanding of operational risk
  • business managers who are concerned about risk and controls
  • IT and operations professionals
  • project and change management professionals

Have this course presented In-House

  • On a date, time and in a location of your choice
  • Topics expanded or deleted to your bespoke requirements

Have this course pre-recorded

  • Full course recording edited exclusively for your company
  • Files converted to enable housing on your LMS

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