What is operational risk?

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

The breach of any of those functions or failure to execute effectively may lead to institution's reputational loss.

Operational risks range from the very small, for example, the risk of loss due to minor human mistakes, to the very large, such as the risk of bankruptcy due to serious fraud.

Operational risk can occur at every level in an organisation.

It may that an operational risk assessment is required as part of your duty holder risk management procedures.

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