Operational Risk


Operational Risk is defined as the risk of loss resulting from inadequate or failed processes, people, and systems or from external events.

These risks are further defined as follows:

  • Process risk – breakdown in established processes, failure to follow processes or inadequate process mapping within business lines.
  • People risk – management failure, organizational structure or other human failures, which may be exacerbated by poor training, inadequate controls, poor staffing resources, or other factors.
  • Systems risk – disruption and outright system failures in both internal and outsourced operations.
  • External event risk – natural disasters, terrorism, and vandalism.
  • Regulatory Risk

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