All You Need to Know About Operational Risk Management

1. All You Need to Know About Operational Risk Management Operational risk is considered as a risk of loss which is a resultant of ineffective internal processes. These operational risks are associated with systems, people, or external events which can impact the overall business operations negatively. The risks and losses can be both financial and non-financial. Simply speaking, these risks are viewed as chain reactions owing to overlooking issues, which ultimately lead to higher risk materialization that can have a deep impact on company’s bottom line and reputation. Operational risk management is a subset of overall enterprise risk management, excluding reputational, strategic, and financial risks from its purview. GDR Privée is a leading wealth and operational risk management service provider that is run by experts who have a knack of altering businesses about potential losses and affirming its standing in the market. What are the Types of Operational Risk Tapped by GDR Privée? There is no business in particular that is devoid or free from running into operational risk. Since such risks can stem from any level of functioning, be it an inefficient employee to a wrong decision taken by the management, operational risk has a huge sphere to occur and grow. Some of the common types of operational risks identified in a business model include:

2.       Improper employee conduct Data privacy breach due cybersecurity attacks Risk related to tech such as robotics, automation, or artificial intelligence Loose-end business controls Physical events such as fire or natural disasters Internal and external fraud What are the key steps taken to mitigate Operations Risk by GDR Privée? As your business welfare partner, this firm breaks down the steps of operational risk mitigation into five phases. Not only these phases help in eliminating the prevalent risks in an operational system, but also work on ensuring that business remains water tight from invasion of any future risks as well. Let’s take a look at these:  Phase 1: Risk identificationis the first phase wherein the risk management consultants from GDR Privée assess and understand a company’s objectives to spot the area of weakness.  Phase 2: Risk assessment: It is the next step in which the potential risks are rated in order of their probability of occurrence along with their impact.  Phase 3: Risk mitigation involves selecting the best possible path to avoid that risk from happening. This further involves call to action options like transfer, avoid, accept, and control.  Phase 4: Risk Control: Business that choose to opt for the last one as their plan of action have to make watertight strategies around risk control.  Phase 5: Monitoring: Once the controls are implemented, the last step is to continuously monitor and see their effectiveness and revise plans if required.