Operational Risk Management and Mitigation
19-21 October 2010 Dubai, London - TBA
A 3 day intensive course on Operations Risk Management & Mitigation – From assessment to implementation.
All too often institutions have seen the need to effectively manage their operational risks as simply an issue of complying with what the regulator requires, rather than a disciplined process that serves to not only ensure a company's survival but which can, in the long run, contribute to that its financial fortune.
Implementing an effective Operational Risk Management regimen is a complex process. At its core is an understanding of what Operations Risk is, how it can be managed.
This course explores the Operations Risk management function and mitigation strategies. It is intended to move the participants beyond the international compliance requirements for operational risk and into an understanding of risk as a value added proposition, increasing profitability and structural strength.
By the end of this training you will gain:
- An understanding of risk in all its facets
- Learn about operational risk in the context of Basel II and beyond
- Techniques for managing/mitigating operational
- Techniques to implement operational risk management in practice
- Explore current best international practice
Course Level: This training has been designed for existing Risk Management Professionals (both beginners & intermediate) who want to enhance their risk management knowledge & skills
Main Topics Covered During This Training
- Risk types and Basel II
- Operations Risk in the context of Basel II
- Strategies for managing operations risk: setting up objectives, the governance process and compliance requirements
- Measuring operational risk
- A hands on approach to risk management: policy and structure, designing controls and more
- Examples of operational risk: internal and external fraud; execution and delivery
- Scenario analysis for operational risk management planning
- Managing specific risk areas: payments and Back office
What Will You Learn By The End Of This Training
The aim of the course is to provide:
- An understanding of Risk in all its facets
- What Operational Risk is all about
- Techniques for managing/mitigating operational
- Coaching risk managers on how to implement them in practice in a banking organization
Who Should Attend
From Commercial Banks, Central Banks, Investment Banks, Asset Management firms’ representatives, Pension Funds, Hedge Funds, Leasing companies, Insurance companies, Fund Managers and other financial institutions:
- Financial Officers
- Risk Officers
- Internal Auditors
- Operational Risk Managers
- Payments
- Fraud Prevention Officers
- Staff with roles and responsibilities in operational risk in risk management departments, businesses and central departments
Teaching Method
This training course uses a combination of prepared tuition, examples, and case studies. Most importantly it will offer participants, opportunities to plan such work within small working groups, providing practice in the application of the techniques and tools generating active participation.
Case study materials as well as lecture presentations to set out the key issues in developing good operational risk management in banks.
Day One
The first two days define operational risk - the methodology and measurements of the various departments. Specific areas will be examined in day three in order to provide practical examples in a diversity of bank operations areas.
What is risk?
- A short history of risk
- Dimension & drivers of risk management
- Business drivers
- Regulatory drivers
- Rating Agencies & risk
- Cross-border implications
Risk Types
- How we categorize risks
- What is covered under Basel II?
- Risk categories
- Basel II risk coverage
- Operational risk categorization
- The financial risk management environment
- The operational risk management environment
- The technical Implications of operations risk management
Risk & Capital - An Introduction to Basel I & II
- What is capital?
- The BIS capital standards
- Basel’s three pillars
- Basel’s operational risk options
- Implementation considerations
- Implementation of Basel II
- The Pillar II maze
- Implementation issues
Operations Risk & Basel II
- BIS standards for managing operational risk
- Basic Indicator Approach (BIA)
- Business Lines Approach
- Advanced Measurement Approaches (AMA)
- Loss event types
- Criteria for the Advanced Measurement Approach
Managing Operations Risk
- The governance process
- Setting risk management objectives
- Building a risk culture
- Examples of a staff risk culture
- Examples of management risk culture
- Why are risk cultures important?
- Compliance requirements
- Operational risk – definition and examples
- Enterprise Risk Management
- Key elements in managing operations risk
- A selection of case studies to illustrate the material covered
- The banking activity framework - the “Top-Down” approach of the BIS
- Main areas affected by operational risk
- Key Risk Factors
Day Two
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Measuring operational risk
- Risk Analysis
- Determining the “Risk Appetite”
- Risk impact/Frequency
- Impact vs. Probability
- A generic case study
- Measurement methods
- The Loss Modeling Method
- The COSO ERM framework
- Monte Carlo simulations
- Operational risk & bank strategy
- Quantitative & Qualitative approaches
- Operational risk & the business cycle
- Problems in identifying operational risks
Developing an appropriate Risk Management Environment
- Policy & structure
- Developing an appropriate risk management environment
- Implementation
- Mapping risks to controls
- Understanding risks, goals and priorities
- Prioritizing risk based on probability & impact
- Establishing responsibilities for risk management
- Mapping risk strategies to categories of control
- Designing & Documenting specific controls
- Implementing risk management controls
Specific examples of Operations Risks
- Internal Fraud
- External Fraud
- Employment Practices and Workplace Safety
- Clients, Products & Business Practices
- Damage to Physical Assets
- Execution, Delivery & Process Management
- Business Disruption & System Failures
Managing Operations Risk
- Assessment methods
- Loss data collection (internal & external)
- Using loss data
- Scenario analysis
- Using realistic scenarios
- Statistical techniques
- Problems and issues in assessing & managing operational risk
The Risk Management Process
- Environmental survey
- Technology inventory
- Identifying & assessing the operational risks (including an illustrative operations risk management plan)
- Minimum control requirements
- Risk identification tools
- Control & mitigation of specific operational risks
- Establishing a framework of formal, written policies and procedures
Day Three
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Operational Risk - Assessing & Managing Specific Risk Areas
This section of the course provides a detailed overview of assessing and managing risks in specific bank operations areas. There are three core areas: two relate to payments while the third covers all internal (or back office) operations.
Wholesale payments systems
- Real Time Gross Settlement (RTGS)
- Large Value Transfer Systems (LVTS)
- Cash management products
- Securities & collateral
- Interbank messaging systems
- Cheque payments
- Continuous Linked Settlement (CLS)
Retail payment systems
- Payment instruments (Cheques, Electronic Payments, Cards, ATMs, Internet)
- Retail payment systems
Operations
- Core operations
- Distributed operations
- Standalone microcomputers
- Support functions
- Controls
- Environmental
- Technology (preventive maintenance, security, database management, personnel control, internal procedures, change management)
- Storage & backup
Closing CASE STUDIES
- National Australia Bank
- Société Générale
Both these case studies into recent events provide an in-depth examination of operational risk management failures resulted in substantial losses to the institutions concerned as well as the lessons learned.
Richard Barr
Richard holds a B.S. in International Business Administration from San Jose State University in California. His professional experience spans 19 years, 5 of which were spent with Wells Fargo Bank. Another 5 were spent honing his global banking skills, when Richard was involved with International Trade Finance, Real Time Gross Settlement and Cross Border Banking. The past 9 years have been in the private and high-tech sectors providing high-level consulting services, business analysis, project management and training to a wide range of banking clientele across the globe.
He has spent extensive time servicing a diversity of “financial institutional” clients, in South Africa, Poland, Sweden, Ireland, Netherlands, Greece, Bermuda, Malawi, United Kingdom and across North America. Clients include AIB Bank, Eurobank, ABSA Bank, CitiBank, Swedbank, INDEbank, IBM, Montran and Fundtech, as well as many others.
Richard has also filled the role of advisor to central banks on payment systems and technical payments issues. Furthermore, key staff from the Bank of England, South African Reserve Bank, Central Bank of Ireland and Bank of Portugal who have attended training sessions presented by Richard.
19-21 October 2010 Dubai
Early Bird till 24 September £1995
After that date £2195
Group discount: 2 people - 5% discount, 3 people - 10% discount
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London - Dates TBA
Contact us to find out about the next edition of the course.
Early Bird till 30 September £1995
After that date £2195
DISCOUNTS
- 2 people - 5% discount, 3 people - 10%. Delegates have to be from the same company and book at the same time.
- If you book for 2 courses at the same time you will receive 10% of the value of the cheaper course.
IN-HOUSE TRAINING
If you have a team of 4 or more this course can be customised and organised in-house at your convenience in any of your offices worldwide. Contact one of our advisors to find out more.
Call us now on +44 (0) 207 193 5035
or send an e-mail to enquiry@eurekafinancial.com
