Duration 3 days – 21 hrs
Overview.
The Operational Risk Management in Banking training course is designed to equip banking professionals with the necessary skills and knowledge to effectively identify, assess, mitigate, and manage operational risks within their institutions. Operational risks arise from process failures, fraud, and external events, which can have a significant impact on daily operations. This course provides a comprehensive framework for addressing these risks and strengthening internal controls, risk governance, and reporting mechanisms.
Objectives
- Understand the different types of operational risks in banking and their potential impacts.
- Identify and assess operational risks using structured methodologies.
- Develop and implement effective risk mitigation strategies.
- Design and manage internal controls to prevent operational risk incidents.
- Report operational risks effectively and ensure strong governance frameworks.
- Apply lessons from real-world case studies to enhance operational risk management in their organizations.
Audience
- Risk managers and officers in the banking industry.
- Compliance professionals and internal auditors.
- Operations managers and department heads responsible for risk management.
- Banking professionals involved in governance, control, and oversight functions.
Pre- requisites
- Basic understanding of risk management principles.
- Experience in banking operations, finance, or risk-related roles.
- Professionals currently involved in or transitioning to operational risk management roles.
Course Content
Day 1: Introduction to Operational Risk Management
Introduction to Operational Risk in Banking
- Definition of operational risk and its significance in banking.
- Types of operational risks: internal process failures, human errors, technology risks, and external events (natural disasters, regulatory changes).
- The impact of operational risks on a bank’s performance, reputation, and regulatory compliance.
- Overview of global and Philippine regulatory requirements related to operational risk.
Risk Identification and Assessment
- Techniques for identifying operational risks across various banking functions.
- Tools and frameworks for assessing operational risks, including risk registers and heat maps.
- Risk assessment methods: qualitative vs. quantitative.
- Identifying critical risk indicators (KRIs) and their role in monitoring operational risk.
Group Activity: Operational Risk Identification
- Interactive session where participants work in groups to identify potential operational risks in different areas of banking operations.
Day 2: Risk Mitigation and Internal Control Management
Risk Mitigation Strategies
- Developing and implementing risk mitigation plans.
- Proactive vs. reactive mitigation approaches.
- Process redesign, automation, and technology upgrades as risk mitigation techniques.
- Aligning risk mitigation strategies with the bank’s risk appetite and tolerance.
Managing Internal Controls
- The role of internal controls in preventing and managing operational risks.
- Designing effective internal control systems.
- Monitoring and reviewing internal controls to ensure continuous improvement.
- Fraud prevention controls and technology-enabled fraud detection systems.
Practical Exercise: Designing Risk Mitigation Strategies
- Participants create a risk mitigation plan for a given operational risk scenario, including internal controls and monitoring mechanisms.
Day 3: Risk Reporting, Governance, and Case Studies
Reporting and Risk Governance
- Developing a comprehensive risk governance framework for operational risk management.
- Defining roles and responsibilities for operational risk management.
- Establishing clear lines of communication between risk management, operations, and senior leadership.
- Best practices for reporting operational risk incidents to regulatory bodies and internal stakeholders.
Risk Reporting Structure
- Components of an effective operational risk report.
- Escalation protocols for significant risk incidents.
- Utilizing technology for real-time risk monitoring and reporting.
Case Studies in Operational Risk Incidents
- Analysis of real-world operational risk incidents, including process failures, fraud, and external events in the banking sector.
- Case study examples from global and Philippine banking environments.
- Lessons learned and best practices for managing operational risk incidents.
- Group discussions and reflections on case study outcomes.
Final Group Exercise: Risk Governance and Reporting
- Participants design a risk governance framework and develop an operational risk reporting template for their own institutions.
