Operational Risk

Operational risk refers to the potential for loss resulting from inadequate or failed internal processes, systems, people, or external events. This can include risks from human errors, fraud, technology failures, supply chain disruptions, or natural disasters. Operational risk can affect an organization’s ability to deliver products or services and may lead to financial losses, reputational damage, and regulatory penalties. Effective management involves implementing strong internal controls, conducting regular risk assessments, providing employee training, and developing contingency plans to mitigate potential disruptions.

Basel scope:

Pillar 1
Pillar 2

Capital requirements:

Mitigated by Capital