Operational risk is defined as the risk of loss resulting from inadequate internal processes, misbehaviour of people, failed systems or from external events. Current incidents have shown that unlikely events happen and cause serious damage to organisations across sectors.
Within the banking industry, the rules of Basel II require that operational risks be systematically measured according to three different approaches with increasing requirements on data collection, modelling and risk measurement. A more advanced approach (like AMA) will not only grant a capital relief but also help to better manage these risks and, thus, reduce the impact of defaults.
How BearingPoint brings value
BearingPoint has developed an operational risk management framework that enables the systematic identification, measurement and control of operational risk. The different methods are integrated in this framework. The use of operational risk management methods represent a self-contained and self-repeating process with the following phases:
BearingPoint supports clients setting up an operational risk management framework, developing or enhancing the operational risk management methods and integrating them into their processes.