COURSE DESCRIPTION :
This is an intensive course on Operational Risk Management & Mitigation – from assessing the operational risks to how to implementing a working, viable operational risk management system. Aimed at the financial services industry this course explores the Operational Risk management function and mitigation requirements as mandated in the Basel Accords. A key objective of this course is to move the participants beyond the operational risk compliance requirements set down in the Basel Accords to an understanding of managing operational risk as a value added proposition that can be instrumental in increasing the profitability of the bank while at the same time improving its structural strength.
Now in 2014, the ongoing continuum of headline-grabbing operational risk incidents at banks, other financial institutions, and even regulators continue to keep the issue of operational risk management at the top of agendas of CEO’s , CRO’s, Risk Managers and Internal & External Auditors alike. These incidents are wide ranging and flow from issues like bank ATM collapses, bank operating system failures, regulatory settlements (fines) in the ongoing US sub-prime mortgage saga, rogue traders and the related risk managers who either missed or were willfully blind to all the warning signs.As the size and complexity of financial institutions have increased, so too have the challenges of understanding and reducing operational risks down to truly manageable levels. Increased regulatory concern and scrutiny have also increased the cost of operational risk events in the shape of outright financial loss, regulatory fines, and declining customer confidence.
Operational Risk Management (ORM) is an effective tool for not only maintaining but increasing, bank profits, shareholder value, public perceptions and goodwill.Executed properly, improvements in ORM can lead to substantial financial, reputational and regulatory benefits – all this adds up to increased profitability, greater financial stability and improved customer satisfaction – in short, a better safer bank/ financial institution. But, to achieve these gains, financial institutions must apply a consistent and comprehensive approach to managing their operational risks. They must also understand that this approach is fundamentally different from the approaches that they use in managing market, credit and liquidity risks.
“Bad" Operational Risk Management has a severely negative effect on financial institutions in four very clear ways;
- Actual operational risk losses are a direct hit to the income statement. Equally, the massive fines being paid have the same effect.
- The market punishes companies, via the stock price, for operational risk failures. This loss of value could well exceed the actual financial loss experience by the risk event in the first place.
- Lowered Credit Ratings, which raises the institution's cost of borrowing in the marketplace
- Operational risk failures can vastly increase the cost of compliance by raising the level of regulatory scrutiny and complexity not to mention substantial penalties.
All too often banks have seen the need to effectively manage their operational risks as simply an issue of complying with what the bank regulator requires, in this case, the operational risk requirements of the Basel Accords, rather than a disciplined process in its own right, that serves to not only ensure a bank's survival but which can, in the long run, contribute to that bank’s financial fortune. Implementing an effective Operational Risk Management routine (“Good” Operational Risk Management) is a complex process. At its core is an understanding of what Operational Risk is and how it can be managed.
This course is an intensive introduction to Operational Risk Management and Mitigation. It is designed to provide a practical “hands-on” approach to participants which will furnish them with all the tools and techniques they need to begin implementing what they have learned almost as soon as they return to the office.The underlying course philosophy is to move the participants beyond the largely theoretical international compliance requirements for operational risk (specifically those contained in the Basel Accords), and into an understanding of the practice of operational risk management and an ability to actually implement these procedures.
WHY SHOULD YOU ATTEND :
The objectives of this training course are to provide all staff, irrespective of whether they work in the front-, middle- or back-office, with a sound foundation in the theory and practice of Operational Risk Management. This training is provided in a practical “hands-on” manner that allows them to implement what they have learned easily and effectively the minute they return to the office.
This course provides a complete structured package for learning in all main aspects of the subject of managing Operational Risk under the Basel Accords. It will enable participants to prepare and manage the planning and implementation of operational risk management processes in their bank/ financial institution or firm.This training course uses a combination of prepared tuition, examples, discussions, exercises and case studies.
Most importantly it will offer participants, opportunities to share experiences and plan work within small working groups, providing practice in the application of the techniques and tools generating active participation.
AREAS COVERED IN THE SESSION :
The aim of the course is to provide;
- An understanding of Risk in all its facets
- What the Basel Accords say about operational risk and its mitigation
- An understanding of Operational Risk Techniques for assessing, managing and mitigating Operational Risk
- A link between Operational Risk management theory & practice
- A clear “roadmap” on how to implement an Operational Risk management structure them in practice in a banking organization.
WHO WILL BENEFIT :
- Commercial Banks
- Central Banks
- Bank Regulators
- Asset management firms’ representatives
- Pension funds
- Hedge Funds
- Leasing companies
- Insurance companies
- Fund managers
- Other financial institutions
- Financial Officers.
- Risk Officers.
- Internal Auditors.
- Operational Risk Managers.
- Compliance Officers
- Staff with roles and responsibilities in operational risk in risk management departments, businesses, and central departments.
- All front-, middle- and back-office staff in operational roles.
- This course is not restricted to management staff alone but to all staff who are required to be “Operational Risk” aware.
NASBA Certificate with 16.5 CPE Credits
Management Advisory Services: 7 CPE Credits
Economics: 2 CPE Credits
Business Management and Organization: 2 CPE Credit
Computer Science: 1 CPE Credit
Production: 1 CPE Credit
Regulatory Ethics: 1 CPE Credit
Specialized Knowledge and Applications: 1 CPE Credit
Statistics: 1 CPE Credit
Social Environment of Business: 0.5 CPE Credit
Total CPE credits earned in this seminar: 16.5 CPE Credits
16.5 CPE Credits