Operational Risk Management in Finance - Virtual Learning
Operational Risk Management plays a critical role within financial institutions due to the inherent complexities and vulnerabilities of their operations. It is essential for these institutions to identify, assess, and mitigate operational risks to protect their financial stability, reputation, and regulatory compliance. By effectively managing operational risks, financial institutions can minimize the likelihood and impact of operational failures, such as fraud, technology glitches, human errors, or inadequate internal controls. This proactive approach not only enhances overall operational efficiency and resilience but also instills confidence among stakeholders, including customers, investors, and regulators, fostering a sustainable and trustworthy financial ecosystem.
This comprehensive course provides participants an opportunity to enhance their understanding of the methodologies and best practices for improving operational risk management within financial institutions. Through in-depth discussion and examples, participants will explore a diverse range of activities that have the potential to result in operational losses. Moreover, participants will learn techniques to effectively estimate the frequency and severity of such losses from both an internal management and compliance standpoint.
The course places emphasis on the significance of enterprise-wide risk management, highlighting the necessity of extending surveillance across all facets of an organization's operations. Special attention will be given to the criticality of internal risk controls and monitoring procedures, with a specific focus on areas such as conduct risk, cyber risks, internal and external fraud, and money laundering.
The course also emphasizes the elements that contribute to fostering a strong risk culture within an organization, along with the impact of robust corporate governance on operational practice.
PrerequisitesNone — open to managers at all levels
5 Days
1800 Sessions
Starting from USD 2,000
Available Face to Face
Certified
Course Methodology
This course will cover a wide range of learning methods including explanatory slides, case studies, and detailed examination of Excel models in an interactive workshop style environment.
Course Objectives
By the end of the course, participants will be able to:
- Analyze the range of circumstances that can contribute to substantial operational losses.
- Develop and create Key Risk Indicators (KRI) for effective monitoring of operational risk.
- Apply various techniques to mitigate losses resulting from operational failures.
- Assess the impact of corporate culture on promoting best practices in operational risk management.
- Integrate digitization, FinTech, and blockchain into banks' business systems and procedures, taking into account their disruptive influence on the traditional business model.
- Evaluate and employ root cause analysis methodologies to diagnose and mitigate potential operational failures.
Target Audience
The course is valuable for those interested in operational risk modelling and those engaged in compliance with all applicable regulations regarding operational risk in financial institutions. This includes, but is not limited to, banking personnel in all areas of operational risk; asset allocators/portfolio strategists; risk managers/controllers; and senior personnel in the back office.
Target Competencies
- Operation risk modelling
- Damage assessments
- Diagnostic approaches
- Operations
- Operational risk management
Course Outline
- Overview of Key Operational Risk Issues
- The impact of operational risk on the organization
- Regulatory focus on issues relating to misconduct of management and employees
- Systems of accountability, responsibilities bounded by safety thresholds, alerts, disciplinary guidelines, sanctions for violation
- Implementing an organizational structure
- Estimating probability of adverse outcome and loss to business
- Determining the direct and indirect effects of an adverse outcome
- Separation of risk compliance function from P&L targets
- Cyber risks – internal vulnerabilities, integrity of software systems, third party risk, outsourcing, cloud computing, phishing, etc.
- Adverse Consequences from Operational Failures
- Reputational risk
- Legal risk
- Litigation risk, fines, and class action lawsuits
- Rogue trading – Soc Gen, UBS, ineffective back-office controls
- Avoiding overly complex instruments
- Root Cause Analysis
- Identification of underlying causes for operational failures
- Forensic and systematic analysis of large-scale failures and near failures
- Data mining approaches and timeline sequences
- Transforming from a reactive approach to operational failure to a pro-active approach
- Prioritizing amongst multiple root causes
- Process mapping
- Establishing the relevant metrics for each root cause
- Checks to ensure that action plans would alleviate or mitigate symptoms arising from root causes
- Addressing Cyber Risks and Vulnerabilities in Business Processes
- Core concepts in the architecture of enterprise software, especially systems integration and security issues
- Principal sources of cyber risk – internal and external
- Risks associated with introducing new business systems
- Risks associated with introducing new products
- Opportunities and challenges presented by new, disruptive technologies – blockchain, AI, Big Data analytics, machine learning
- The cultural divide between IT “tech” staff and senior management
- Business process re-engineering (BPR)
- Differentiation between prevention and managing negative outcomes.
- Cloud computing and outsourcing - Amazon Web Services
- Change management – implementing new requirements on privacy, GDPR etc.
- Methodologies for Measuring and Modelling Operational Risks
- Loss Modelling Methods – contingency scenarios
- Templates for collecting loss data
- Using Scenario Based Analysis (SBA) for filling in gaps in data
- The role of Business Environment Internal Control Factors (BEICF’s)
- Scarcity of historical data in the outliers for operational losses
- Different distributions for modelling severity of losses
- Monte Carlo based loss scenarios
- Stress testing methodologies
- Data limitations involved in quantifying operational risks
- Segregating internal versus external software failures
- Risk Control Self-Assessment (RCSA)
- Templates for collecting loss data
- Using Scenario Based Analysis for filling in gaps in empirical data
- Questionnaires – alerts to potential risk areas and points of failure
- Conducting an RCSA Workshop – role of facilitators, experts, back office
- Internal Reporting mechanisms - iterations, validation protocols
- Key Risk Indicators – developing new KRI’s and following peer groups.
- Reporting protocols
- The role of Business Environment Internal Control Factors (BEICF’s)
- Developing templates for Scorecard based risk assessment
- Discrete versus continuous data is used for the modelling
- Explanation of Poisson distribution for occurrences of operational losses
- Different distributions for modelling severity of losses
- Application of a lognormal distribution
- Overview of Scenario Generation for Stress Testing
- How to generate and calibrate shocks and adverse scenarios
- Simulations – randomized market scenarios expressing risk factors
- Macro factors – establishing associations with broad macro-economic variables
- Expert judgment – qualitative and forward looking
- Identification of key risk factors
- Associating probabilities to risk factors – quantitative and qualitative approaches
- Mapping qualitative and descriptive data to numerical values
- Identification of worst-case scenarios
- Data deficiencies and estimation of outlier scenarios
- How to generate and calibrate shocks and adverse scenarios
- Fundamentals of Business Ethics
- Ethics as moral principles which govern good behaviour
- Distinguish between ethical issues and legal issues
- Business ethics and corporate social responsibility (CSR)
- A socially responsible firm should be an ethical firm and vice-versa
- Responsibility to all stakeholders and not just shareholders
- How do businesses ensure that directors, managers, and employees act ethically?
- Codes of conduct and best practice
- Environmental policy and actions
- Rules for personal and corporate integrity
- Is the corporation a moral agent?
- Financial Crimes and Anti Money Laundering
- Surveillance of financial services sector by regulatory bodies
- Know Your Customer (KYC) and Anti-Money Laundering (AML) remediation
- International context for Anti-Money Laundering (AML)
- Focus on Counter Terrorist Financing (CTF)
- Legal, regulatory, and supervisory frameworks underpinning AML/CTF
- Money Laundering Reporting Officer (MLRO)
- Transaction Monitoring and Filtering Framework
- Suspicious Activity Reporting
- Senior Management Responsibility regarding AML/CTF
- Role of banking supervisors
- Sanctions provisions and “blacklisted” territories and individuals.
- Tax avoidance - FATCA
- Consumer protection focus - SEC, FCA, CFTC, EU Commission
- Public Policy and the Role of Financial Regulators
- Balancing regulatory compliance and internal best practice
- Increasing focus on macro-prudential regulation – stress testing
- Role of political action groups and commercial lobbying
- Surveillance of financial services sector by regulatory bodies
- Focus on boundaries between financial crime and operational vulnerabilities.
- Examination of the robustness of procedures to avoid money laundering.
- Description of $10 billion fine to BNP Paribas for dealing with clients in countries on US “black list”
- Capital adequacy, Basel III, role of banking supervisors
- Miscellaneous risks arising from government/supra national actions
- Basel Approaches for Operational Risks
- Basel Basic Indicator Approach (BIA) and Standard Approach (SA)
- Explanation of the Basel III Advanced Measurement Approach (AMA)
- Scenario Based Approach (SBA)
- Loss Distribution Approach (LDA)
- Business environment and internal control factors (BEICFs)
- Role of senior management in identifying adverse scenarios
- Distributions for occurrence and severity of losses
- Basel III Business Line and Event Type Codes
- Process Mapping – mapping processes to appropriate regulatory categories
- Templates for data capture for Basel compliance and internal reporting
- Role of external data – scaling of comparable institutions
- The New Basel Standardized Approach for Operational Risk
- BCBS documents on revisions to op risk approaches
- Explanation of the Business Indicator metric
- Non-linear scaling of operational risk to total revenue of a bank
- Using absolute values for estimating bank’s exposure to operational risk
- Review of the BCBS Operational risk Capital-at Risk (Op CaR) model
- Internal Loss Multiplier and Loss Component
- Enterprise Risk Management and Reporting Systems
- Enterprise-wide risk control environment
- Risk assessment process
- Credit policy and levels of authority for credit decision making
- Monitoring/reporting mechanisms within banks
- Risk control systems
- Holistic views regarding risk
- Avoidance of silos
- Monitoring of controls
- Role of internal auditors
- Role of the Chief Risk Officer
- Best Practice in Enhancing Risk Culture
- Risk control systems
- Risk governance philosophy
- Ethical principles
- Codes of conduct
- Human resources personnel
- Ongoing professional development
- Diversity of perspectives
- Rewards and bonuses
Al mawred Professional Certificate
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2026 Schedule & Fees
Course Fees Starting From
USD
2,000
| Date | City | Language | Price | Action |
|---|---|---|---|---|
| 07 Jun - 11 Jun, 2026 | Online | English | USD 2,000 | Book |
| 07 Jun - 11 Jun, 2026 | Online | Arabic | USD 2,000 | Book |
| 14 Jun - 18 Jun, 2026 | Online | English | USD 2,000 | Book |
| 14 Jun - 18 Jun, 2026 | Online | Arabic | USD 2,000 | Book |
| 21 Jun - 25 Jun, 2026 | Online | Arabic | USD 2,000 | Book |
| 21 Jun - 25 Jun, 2026 | Online | English | USD 2,000 | Book |
| 28 Jun - 02 Jul, 2026 | Online | Arabic | USD 2,000 | Book |
| 28 Jun - 02 Jul, 2026 | Online | English | USD 2,000 | Book |
| 05 Jul - 09 Jul, 2026 | Online | English | USD 2,000 | Book |
| 05 Jul - 09 Jul, 2026 | Online | Arabic | USD 2,000 | Book |
| 12 Jul - 16 Jul, 2026 | Online | English | USD 2,000 | Book |
| 12 Jul - 16 Jul, 2026 | Online | Arabic | USD 2,000 | Book |
| 19 Jul - 23 Jul, 2026 | Online | Arabic | USD 2,000 | Book |
| 19 Jul - 23 Jul, 2026 | Online | English | USD 2,000 | Book |
| 26 Jul - 30 Jul, 2026 | Online | Arabic | USD 2,000 | Book |
| 26 Jul - 30 Jul, 2026 | Online | English | USD 2,000 | Book |
| 02 Aug - 06 Aug, 2026 | Online | Arabic | USD 2,000 | Book |
| 02 Aug - 06 Aug, 2026 | Online | English | USD 2,000 | Book |
| 09 Aug - 13 Aug, 2026 | Online | Arabic | USD 2,000 | Book |
| 09 Aug - 13 Aug, 2026 | Online | English | USD 2,000 | Book |
| 16 Aug - 20 Aug, 2026 | Online | Arabic | USD 2,000 | Book |
| 16 Aug - 20 Aug, 2026 | Online | English | USD 2,000 | Book |
| 23 Aug - 27 Aug, 2026 | Online | Arabic | USD 2,000 | Book |
| 23 Aug - 27 Aug, 2026 | Online | English | USD 2,000 | Book |
| 30 Aug - 03 Sep, 2026 | Online | English | USD 2,000 | Book |
| 30 Aug - 03 Sep, 2026 | Online | Arabic | USD 2,000 | Book |
| 06 Sep - 10 Sep, 2026 | Online | English | USD 2,000 | Book |
| 06 Sep - 10 Sep, 2026 | Online | Arabic | USD 2,000 | Book |
| 13 Sep - 17 Sep, 2026 | Online | Arabic | USD 2,000 | Book |
| 13 Sep - 17 Sep, 2026 | Online | English | USD 2,000 | Book |
| 20 Sep - 24 Sep, 2026 | Online | Arabic | USD 2,000 | Book |
| 20 Sep - 24 Sep, 2026 | Online | English | USD 2,000 | Book |
| 27 Sep - 01 Oct, 2026 | Online | Arabic | USD 2,000 | Book |
| 27 Sep - 01 Oct, 2026 | Online | English | USD 2,000 | Book |
| 04 Oct - 08 Oct, 2026 | Online | Arabic | USD 2,000 | Book |
| 04 Oct - 08 Oct, 2026 | Online | English | USD 2,000 | Book |
| 11 Oct - 15 Oct, 2026 | Online | Arabic | USD 2,000 | Book |
| 11 Oct - 15 Oct, 2026 | Online | English | USD 2,000 | Book |
| 18 Oct - 22 Oct, 2026 | Online | Arabic | USD 2,000 | Book |
| 18 Oct - 22 Oct, 2026 | Online | English | USD 2,000 | Book |
| 25 Oct - 29 Oct, 2026 | Online | Arabic | USD 2,000 | Book |
| 25 Oct - 29 Oct, 2026 | Online | English | USD 2,000 | Book |
| 01 Nov - 05 Nov, 2026 | Online | English | USD 2,000 | Book |
| 01 Nov - 05 Nov, 2026 | Online | Arabic | USD 2,000 | Book |
| 08 Nov - 12 Nov, 2026 | Online | Arabic | USD 2,000 | Book |
| 08 Nov - 12 Nov, 2026 | Online | English | USD 2,000 | Book |
| 15 Nov - 19 Nov, 2026 | Online | English | USD 2,000 | Book |
| 15 Nov - 19 Nov, 2026 | Online | Arabic | USD 2,000 | Book |
| 22 Nov - 26 Nov, 2026 | Online | English | USD 2,000 | Book |
| 22 Nov - 26 Nov, 2026 | Online | Arabic | USD 2,000 | Book |
| 29 Nov - 03 Dec, 2026 | Online | English | USD 2,000 | Book |
| 29 Nov - 03 Dec, 2026 | Online | Arabic | USD 2,000 | Book |
| 06 Dec - 10 Dec, 2026 | Online | Arabic | USD 2,000 | Book |
| 06 Dec - 10 Dec, 2026 | Online | English | USD 2,000 | Book |
| 13 Dec - 17 Dec, 2026 | Online | English | USD 2,000 | Book |
| 13 Dec - 17 Dec, 2026 | Online | Arabic | USD 2,000 | Book |
| 20 Dec - 24 Dec, 2026 | Online | Arabic | USD 2,000 | Book |
| 20 Dec - 24 Dec, 2026 | Online | English | USD 2,000 | Book |
| 27 Dec - 31 Dec, 2026 | Online | Arabic | USD 2,000 | Book |
| 27 Dec - 31 Dec, 2026 | Online | English | USD 2,000 | Book |
Face to Face Courses
Face to Face
Operational Risk Management in Finance
5 Days
1740 Sessions
Certified
Banking, Insurance and Financial Services
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