Operational Risk Management Services

Fadcon International Consulting

Operational Risk Management

Operational risk entails risk arising from inadequate or failed internal processes, people, systems and external events. From the largest, operational risk exists in every organisation, regardless of size or complexity.

Operational risk management is the management of business processes. Ineffective operational risk management can cause a severe breakdown of business continuity, like the risk of fraud to a bank’s payment system, leading to significant losses.

Operational risk management entails all risk assessment measures (including self-assessments) of the business’ ongoing processes, event management, risk decision-making, implementation of risk controls, and key risk indicators to determine the inherent risk exposures to the business operations. It can then keep an eye on them and prevent them from happening.

Why is Operational Risk Management Important?

An operational risk management framework is vital because it can lead to informed business and investment decisions. This is especially effective if operational risk management is associated with a firm’s operational risk appetite. A firm’s operational risk appetite is the amount and type of risk the organisation is willing to take to meet its operational objectives.

An operational risk management framework must identify, assess, monitor and report the organisations’ risks and their consequences on the business continuity plans. It should lay the foundations for internal controls (and, therefore, a controlled environment) to keep any risks at acceptable levels at bay. Once implemented, it should occupy a place at the heart and centre of the business’s risk management practices and risk culture.

No business has a perfect Operational Risk Management framework because organisations differ. But all Operational Risk Management frameworks should aim at improving the general risk culture of an organisation. Operational Risk Management frameworks should also be cohesive, consistently applied, and well-embedded into business practices.

How Fadcon International Consulting can help your Company's Operational Risk Profile

Fadcon International Consulting offers broad capabilities to assist your organisation with Operational Risk Management. In our experience, assumption-based risk management processes are the most effective way of identifying, analysing and managing the underlying risks of any business process.

Fadcon International Consulting’s Operation Risk Management approach has several benefits, including:

We use Assumption Based Communication Dynamics (ABCD) Operational Risk Management method, which focuses on ‘assumptions’ and not ‘risks’. This removes any negative psychology from the framework.
By focusing on assumptions (i.e. what needs to happen for the business to be successful), people are more likely to think ahead. Therefore potential problems are anticipated rather than ignored.
Assumptions are the root cause of any risk and are, therefore, easier to manage than the symptoms and effects of the risk itself.
ABCD implements a meaningful analysis that provides insight into how your team perceives its business processes.
ABCD provides clear prioritisation at all levels of the business, along with clear routes for risk escalation to mitigate operational loss.
The process also ensures follow-through on actions via simple but effective governance structures and processes. This also helps to deal with residual risk.

Fadcon International Consulting will help your organisation to develop a sound Operational Risk Management Framework. Engage us for your organisation’s operational risk management services. Complete the form below for our Risk Management Services.

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