Operational Risk Experience

Course Overview
Today, most institutions agree that an essential part of effective management of operational risk is understanding how operational risk manifests itself in their firms. But how do you approach capturing and using information on your firm's operational risk experience?

Operational Risk Experience will help corporate-level and division-level operational risk managers design and implement effective programs for collecting, analyzing, and using information on operational risk experience in their firms.

Participants will build a solid conceptual foundation and apply this in practice through hands-on case studies and exercises. Takeaways include templates and taxonomies.

Who will benefit?
This course will be of value for corporate-level and division-level operational risk managers responsible for putting in place the firm's first operational risk experience program or for enhancing an existing early-stage program. Smaller firms in particular will find the material pertinent and practical.

You will be able to:

• Understand that operational risk experience is broader than just operational risk losses.
• Understand and articulate how operational risk experience fits into the operational risk management framework.
• Establish a strategy for implementing an operational risk experience program in your firm.
• Define operational risk experience in terms that are relevant for your firm.
• Articulate the kind of information you need to obtain to build a comprehensive picture of your firm's operational risk experience.
• Determine the sources of information available throughout your firm.
• Determine the best means for obtaining the information.
• Classify the information to support analysis and reporting.
• Derive and communicate value-adding information to support decision-making by business management, senior management, and the board of directors.

Course Outline

Day One, Morning
A Fresh Look at Operational Risk

• Definition and scope.
• Risk boundaries.
• Operational risk and enterprise risk management.

Key Outcome: An understanding of the scope and breadth of
operational risk and, consequently, of operational risk experience.

Operational Risk Management Framework

• What it is.
• What it does.
• Why understanding operational risk experience is a key component.

Key Outcome: An understanding of the key role of operational
risk experience in the set of established and developed tools used
to manage and measure operational risk.

Day One, Afternoon
Operational Risk Experience

• Defining operational risk events.
• Measuring/sizing operational risk events.

Key Outcome: An understanding of the different ways in which
operational risk can manifest itself in the firm.

Getting Operational Risk Experience Information

• What information to collect
• Thresholds
• Sources of information
• Collecting information
• Timing

Key Outcome: A practical understanding of what information to
collect and how to collect it.

Day Two, Morning
Getting Operational Risk Event Information

• Classifying information

Key Outcome: An understanding of a key step in making the
information useful.

Using Operational Risk Event Information

• Analysis
• Getting value
• Reporting

Key Outcome: A practical understanding of what to do with the information to add value to the firm.

Day Two, Afternoon
Governance and Oversight

Key Outcome: An understanding of the roles and tools of senior management and the board of directors for ensuring a robust operational risk experience program that adds value for the firm. Implementing a Program

• Build on existing activities.
• Implement in phases.
• Integrate with other operational risk management framework components.

Key Outcome: A practical understanding of how to implement an operational risk experience program in your firm. Supporting Tools and Concepts

• Common language
• The event continuum
• Multiplicity of causes
• Reporting formats

Key Outcome: An understanding of concepts and tools that can make the operational risk program more robust and effective. Insights and Participation

Participants will gain valuable insights through discussion and debate. Insights will come from the concepts presented by the instructor, from the case studies, and from the case-study solutions developed by the participants. Participants will gain critical insights from the exchange of ideas and should come prepared to discuss current practices and challenges in their organizations and their thoughts for the future, within the bounds of