An introduction to operational risk

About the Programme

Operational risks affect everyone and can occur anywhere within the business. Losses can be financial, but they can also be non-financial, eg reputational damage or regulatory action such as monitoring or growth limits. Given the nature of operational risk, the consequences of a risk event can be considerable – both financially and commercially.

Businesses’ returns are seen as rewards for risk-taking, but risks should be managed and kept within acceptable limits. Failure to manage operational risks – resulting in lapsed processes, inadequate systems, or poor governance – can hinder the smooth running of a bank and cause lasting damage to its reputation. For this reason, it’s critical that operational risks are managed properly.

Why study This programme?

This programme is open to those who currently work in a bank or financial institution and are interested in getting into a risk related role or increasing their awareness of risk.

During this short course you will explore what operational risk is and the importance of managing risk.

Financial risks are many and varied. Some of the most common result from refinancing, foreign exchange risks and changes in a bank’s credit rating.

One of the key processes used to help manage these different types of risk is a risk management framework. This outlines the steps necessary to effectively manage risk.

Each individual bank decides its own approach. This could be an internationally recognised standard, such as Basel or ISO 31000:2018, or a bespoke framework. Whatever the approach, the framework should conform to sound risk management principles.

By the end of this course you’ll be able to:

  • understand the different types of risk banks face
  • identify possible red flags
  • identify key consequences (financial and non-financial) of operational risks
  • understand the main causes and effects of operational risks for banks and their stakeholders
  • see how business continuity planning, scenario analysis and stress testing is used to manage and minimise the impact of operational risk
  • understand the main aim of operational risk reporting.

Studying

Introduction to operational risk is an online short course you can complete in five hours. Because everything is online you can study at a pace that suits you.

As you work through the unit you will do different digital activities, with diagrams, videos, and quizzes to support your learning.

Each unit can be studied in less than two hours and there is a short quiz at the end of each topic to test your learning. You can also go back and review topics if you need extra support.

When you register you will have six months access to course material.

After you’ve completed the programme, you will receive a digital certificate of completion.

This programme will cost £300 to study.

The Programme

Indicative Content

  • An introduction to risk management frameworks
    • Outline the key stages of a risk management framework
    • Identify other frameworks that can be used to manage operational risk
    • Describe the importance of enterprise-wide risk management
  • What is operational risk management?
    • List the range of operational risks that banks currently face and how they can be classified
    • Apply the risk management framework to a wider range of operational risks to support their effective identification
  • The importance of managing operational risks
    • Describe the consequences of lapses in operational risk management
    • Outline contemporary operational risks that banks must plan for
  • An introduction to managing operational risk
    • Outline the three lines of defence in risk management
    • Understand the basics of scenarios analysis, business continutity plan and stress testing

You’ll be learning on our new VLE Brightspace. Click on the logo to find out more.

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