Presented by:
RMA and ASEAN Bankers Association
Course Overview
Learn how to transform the building blocks of your firm's operational risk
management programs into a cohesive operational risk management strategy. This
advanced course examines operational risk management in the financial services
industry on two fronts: 1) current and emerging practices in the operational risk
management discipline, and 2) the organizational, regulatory, and governance
factors that affect how a financial institution addresses operational risk. Participants
will build a solid conceptual foundation and apply this in practice through hands-on case
studies and exercises.
Who should attend?
Corporate-level operational risk managers, business line operational risk managers,
governance/risk/compliance professionals responsible for managing specific types
of operational risks, and regulators providing supervision of operational risk
management at financial institutions will find value in this advanced course. Typical participants
are taking on broader operational risk management responsibilities and want to build
a more strategic understanding of operational risk management. They are already familiar
with basic operational risk management building blocks such as risk and control assessment,
loss data collection, scenarios, and KRIs.
You will:
- Gain a more strategic understanding of operational risk and the tools
available to identify, measure, control, mitigate, and monitor it.
- Understand and articulate your institution’s operational risks and
exposures, and learn how these fit into its overall risk picture.
- Recognize what is needed to deliver appropriate policies and programs
to address the operational risks in your organization.
- Learn how to raise awareness and build collaboration with your management,
business, and risk partners regarding management of operational risk.
- Understand the relationship between operational risk exposures and risk
capital.
Course Outline
Day One, Morning
A Fresh Look at Operational Risk
What is operational risk? How does it fit into a bank's overall risks?
In this session, we will look at how operational risk is defined and the role it plays in effective enterprise risk management.
Key outcome: A more strategic understanding of operational risk.
Regulatory Expectations
What is happening with Basel II? What are the Basel Sound Practices? What is Basel III? What is the Use Test?
What is ICAAP? What do regulators really want?
Though the spotlight glared on credit risk during this past year, operational
risk managers know the problem wasn't credit risk at all. Sloppy underwriting
practices, unproven black-box models, and human greed slipped through the operational
risk radar. In this session, we will explore the impact current regulatory discussions
may have on regulation related to operational risk management and measurement.
We will also review current U.S. regulation that affects operational risk.
Basel II has been implemented in many jurisdictions outside the United States. We will review implementation of
the operational risk components of Basel II in other jurisdictions, including an overview of approaches taken by
banks in those jurisdictions with respect to operational risk management and measurement.
Key outcome: An understanding of what regulators expect beyond a mere capital number with respect to operational risk.
The Operational Risk Management Framework
Frameworks, frameworks everywhere, but nary a guidepost to see (apologies to poet Samuel Taylor Coleridge). What
is this operational risk management framework I keep hearing about?
In this session, we will discuss the concept of a framework as a set of principles, strategies, policies, and tools
for managing and measuring operational risk within a financial institution. Participants will discuss the role of the
operational risk management framework and learn what is needed to craft, formalize, and implement a framework to support
effective operational risk management. Working with a framework outline in breakout groups, participants will develop a
framework for a fictional bank.
In subsequent sessions, the group will explore and discuss the different aspects of the framework in more depth.
Key outcome: A more strategic understanding of the established and developing tools that can be used to manage
and measure operational risk, including the linkages between these tools.
Day One, Afternoon, and Day Two, Morning
Components of the Operational Risk Management Framework
Participants will explore the key practices that support effective management of operational risk:
- Understanding the bank's operational risks and exposures through risk and
control identification and assessment, analysis of internal event data, review
of external event data, and scenario analysis.
- Monitoring those risks and related drivers using key risk indicators.
- Providing senior management with actionable information on the operational risk profile and exposure of the bank.
- Protecting the bank with adequate operational risk loss backstops such as insurance and operational risk capital.
Operational risk practice has evolved considerably in the past ten years. Despite this, definitive right answers and best practices
have yet to emerge in the still young discipline of operational risk management. Participants will learn about the approaches and
methods currently being used by other institutions in the industry. The discussion on operational risk capital and measurement of
operational risk will explore models, inputs, and challenges in a non-quantitative way that is suitable for all audiences. Several
case studies will be used to illustrate the key concepts. Participants will work with the case studies in breakout sessions to help
build hands-on knowledge that they can apply to operational risk management practices in their own institutions.
Key outcome: A practical understanding of the practices and tools used
to strengthen and measure operational risk and to protect the bank in the event
of an operational risk incident.
Day Two, Afternoon
Risk Governance and Oversight
In this critical and broad-ranging topic, we will discuss the responsibilities and accountabilities of the different
operational risk players in a bank. Participants will examine questions such as: Who owns the risk? What is tone at the
top and why does it matter? What impact does bank culture have on risk-taking and risk management? This session will draw
on what was learned in earlier sessions to help participants explore and debate organizational aspects of managing operational
risk, the key conditions for successful implementation of operational risk management programs, and the effective management
of operational risk.
Key outcome: An enhanced understanding of the intangible aspects of operational risk management—culture, communication,
oversight—and how to more effectively deal with the challenges of creating a risk-aware organization from top to bottom.
A Bank's Perspective
Special Guest Speaker: In this section, Patricia Jalleh, Head of Operational Risk Management at
United Overseas Bank Group in Singapore, will share her experiences with us, leading a discussion of
"Setting Up an Effective Operational Risk Management Framework: A Bank's Perspective".
Emerging Trends and Thoughts
Operational risk management continues to evolve. This session will look at some of the recent developments and ideas emerging
in the industry.
Insights and Participation
Participants will gain valuable insights through discussion and debate during the sessions. Insights will come from the concepts
presented by the instructor, from the case studies, and from the case-study solutions developed by the participants. Critical
insights will also come from the exchange of ideas among participants regarding current practices in their respective
institutions. Participants should come prepared to discuss current practices in their organizations and their thoughts
for the future, within the bounds of any proprietary or confidentiality considerations.
For questions about this course please contact Christopher Yip at cyip@rma-asia.org.
Registration fee
RMA members US$1470
ASEAN Bankers Association Members US$1470
Nonmembers US$1690