Unauthorized activity risk refers to the potential for financial loss or operational disruption resulting from actions taken by individuals who do not have the proper authority to perform those actions. This can include fraud, identity theft, data breaches, or insider threats where employees misuse their access to systems or information. Unauthorized activities can lead to significant financial and reputational damage for organizations. Effective management involves implementing strong access controls, conducting regular audits and monitoring, providing employee training on security protocols, and establishing clear policies for reporting suspicious activities to prevent and respond to such incidents.

Basel scope:

• Pillar 1
• Pillar 2

Capital requirements:

Mitigated by Capital

Related Links:

•       Basel Framework