Operational Risk Framework™
Manage the risk of loss arising from day-to-day operations through RCSA, loss data, KRIs and control testing.
Operational risk is the risk of loss from inadequate or failed processes, people, systems and external events. This framework operationalises identification, control and monitoring across the first line.
Process failures, errors and disruptions recur because risks and controls are not systematically assessed, losses are not captured, and early-warning indicators are missing.
Manage the risk of loss arising from day-to-day operations through RCSA, loss data, KRIs and control testing.
- CROs
- Operational-risk teams
- COOs
- Process owners
- Process & risk taxonomy
- Risk & control self-assessment (RCSA)
- Loss-event database
- Operational KRIs
- Scenario analysis
- Control testing
- First-line process owners run risk-and-control self-assessment; the second-line operational-risk team oversees and challenges; internal audit assures.
Fragile
Maturity level 1 of the shared Outliers risk spine — Fragile.
Functional
Maturity level 2 of the shared Outliers risk spine — Functional.
Disciplined
Maturity level 3 of the shared Outliers risk spine — Disciplined.
Strategic
Maturity level 4 of the shared Outliers risk spine — Strategic.
Resilient
Maturity level 5 of the shared Outliers risk spine — Resilient.
- Define the process and risk taxonomy
- Run RCSA across critical processes
- Stand up loss-event capture
- Design operational KRIs
- Test key controls and remediate
- Operational risk register
- Loss event register
- RCSA workpapers
- Operational KRI pack
- Operational risk policy
- RCSA standard
- Loss-data policy
- Control testing standard
- Loss events (count & value)
- RCSA completion %
- Open critical control issues
- Operational KRIs in breach
- What are our largest operational loss exposures?
- Are key controls tested and effective?
- What do our operational KRIs tell us about emerging stress?
- How quickly do we close control gaps?
Related across the Risk Centre
Across the ecosystem
Knowledge graph · 6 relations