Operational Risk Management Training
60 hours/3 months access/Instructor Supported
Overview
Changes in markets, techniques, technologies, and products have altered the
landscape of Operations and fueled the explosive development of Operational
Risk management. The regulators of financial and public companies are demanding
a far greater level of disclosure and awareness by directors about the risks
they manage and the effectiveness of the controls they have in place to reduce
or mitigate these risks. There is also a greater realization that a major
source of earnings volatility can be attributed to the way a firm operates and
not “financial risk”. All these changes have triggered the need for an
efficient Operational Risk Management system in organizations.
After completing this course you will be conversant with:
Operational Risk
Management
Time taken to complete each Course: Two -
Three hours
1.Introduction to Operational Risk
· Objectives
· Defining operational risk
· Significance of operational risk
· Operational risk management programs
· Addressing operational risk
· Measuring and modeling operational risk
2.Basic Concepts
· Objectives
· Loss events
· Risk Factors, loss types and event/ factor controllability
· Dependencies between Risk Factors and Events
· Attribution of Loss
3.Regulatory Treatment of Operational Risk under Basel-II
· Objectives
· Introduction, Definitions and data issues
· Measurement Methodologies
· Role of Pillars 2 and 3
· Sound Practices
4.Operational Risk in Various Banking Sectors
· Objectives
· Introduction and Spectrum of Risks
· Accounting policies, costing and pricing models
· Private banking sector
5. Operational Risk in insurance
· Objectives
· Introduction
· Risks exclusive to insurance and Regulatory Issues
· Alternative Risk Transfer and Finite Risk Captives
· Captives
6.Developing objectives and identifying risks
· Objectives
· Risk Management Agenda
· Risk Management Targets
· Risk Management Organization and Policies
· Benchmarking Internal Processes and Resources
· Identifying Process and Resource Risks
· Identifying Risk Factors
· Identifying and Categorizing Loss Events
7.Estimating potential losses – Data
· Objectives
· Challenges to Operational Risk analysis
· General measurement techniques
· Historical analysis
· Subjective risk assessment
8. Estimating potential losses – Loss distributions
· Objectives
· Overview of probability distributions
· Building a distribution
· Probability distributions
· Estimating risk factors
· Choosing an event distribution
· Operational Risk database
9. Analyzing risks
· Objectives
· Aggregating risks
· Monte Carlo loss simulation
· Risk management alternatives
· Analyzing loss events
· Analyzing risky processes and resources
· Analyzing risk factors
10. Loss prediction and prevention
· Objectives
· Loss prediction
· Loss prevention
· Process reengineering and work restructuring
· Product redesign and automation
· Human factors engineering
· ERP and reliability maintenance
11. Loss control
· Objectives
· Introduction
· Diagnostic controls and Inventory management
· Redundant systems and boundary systems
· Computer security and physical security management
· Internal and external audit
12. Loss reduction and risk avoidance
· Objectives
· Legal risk reduction and loss isolation
· Contingency Planning
· Crisis Management
· Risk avoidance
· Quality management
· Human resources management
· Organizational design, Culture and relationship management
13. Risk financing
· Objectives
· Introduction
· Financial restructuring
· Asset-Liability Management
· Corporate diversification
· Insurance
· Self-Insurance
· Hedging using derivatives
· Contractual risk transfer
14. Measurement framework
· Objectives
· ORM cycle
· Framework criteria and assumptions
· Current framework approaches
· Measurement process for ORM
· Delta and EVT methodologies
15. ORM in practice
· Objectives
· Learning and response loops
· Guidelines for effective reporting
· Event reports and Operational profiles
· Risk reports
· Evaluating and updating the risk model
· Implementing bank-wide ORM
16. Enterprise-wide Risk Management (ERM)
· Objectives
· Role of technology
· Enterprise-wide risk information systems
· Challenges to ERM
· Project Management for an ERM system
17. Basic and causal models
· Objectives
· Operational Risk Management (ORM) model
· Top-down risk models
· Bottom-up risk models
· Selecting a risk model
· Causal models
18. Legal risk and taxation rules
· Objectives
· Introduction
· Contract enforcement
· Board of directors and shareholder activism
· Management responsibility for legal risk
· Transparency and collateral
· Shifting ground in international taxation
19. E-banking
· Objectives
· Introduction
· Operational risks associated with Electronic Banking
· Security risk
· Systems design, implementation, and maintenance flaws
· Customer misuse of products and services
20. Systems and software
· Objectives
· Introduction
· Framework/Components of an operational risk system
· Operational risk software
· AMELIA
· MICROBANK
· Relex software
· ALGORITHMICS
21. Case study Barings
· Objectives
· Overview
· How the massive losses were incurred
· Lessons to be drawn from the incident
JOB AIDS
· Measurement Tools
· Disclosures
· Global Best Practices
· Policy Templates
Calculators
in Operational Risk Management
1. Probability Distributions
2. Capital Charge Under the Basic Indicator Approach
3. Capital Charge Under the Standardized Approach
4. Internal Measurement Approach
Elearning Features
ProTrain, in partnership with Kesdee, offer state-of-the art simulated learning environment. Exhaustive theoretical material supplemented with contemporary case studies
Learner friendly courses with:
> Formulae, definitions and concise summaries
> Interactive simulations
> Solved examples, practice exercises and quizzes
> Mock exams from proprietary database
> Timed tests in exam format
> Personalized results for self assessment
> Glossary, FAQs, Pocket Reference
> Valuable reference extracts
Other features include :
> E-mail subject-matter expert
> Online with 24x7 customer support