Advanced Operational Risk Management

Strike the right balance in operational risk management with Richard J. Parsons' two-day course, building on the concepts of his popular book, "Broke: America's Banking System".

Course Overview

Richard J. Parsons, author of "Broke: America's Banking System" (published in 2013 by RMA), builds on the concepts in his book with his two-day Advanced Operational Risk Management course. In his book, Parsons describes why operational risk mismanagement is at the root of more than 3,000 bank failures dating back over the past three decades.

His approach to operational risk management is pragmatic, fact-based, and data driven. He challenges conventional wisdom, arguing that too much of operational risk management is form over substance.

Parsons' focus is on substance over form. He uses case studies, checklists, and common sense business practices to help bankers strike the right business balance between risk and return. Ideas and documentation presented in this course are structured to help risk managers and senior bankers dig deep into people, processes, systems, and external risk factors from a business of banking perspective.

Since the course places a great emphasis on case studies and real examples of operational risk management failures, participants can expect the course to center on the business of banking. Much of the discussions will take the perspective of P&L managers, senior management, and the board of directors who do not always see operational risk management practices as value-adding.

Advanced Operational Risk Management is not only beneficial to risk management professionals in the first and second lines of defense, but also human resources and training professionals. Through energetic group discussion, data review, and case studies, you will be challenged to identify emerging operational and strategic risks that have the potential to create material financial losses for financial institutions. 

During the two-day group discussion, you will actively debate how to assess people risk—which as the class reveals—is the holy grail of operational risk management. You will learn that skilled finance professionals are critical to risk identification and will become even more important over the next decade as big data transforms risk management in banks. In addition, you will learn skills to develop controls and early warning triggers used for identifying emerging risks. These skills are essential for effective operational and enterprise risk management.

The program will address:

1. Operational Risk Management's Credibility Gap
2. Majoring in the Majors of 10X Risk
3. Macro External Event 10X Risk KRIs: Processes to Get the "Big Picture" Right
4. Velocity and Volume Changes to the Balance Sheet and Income Statement as the Leading Indicator of Operational Risk
5. Clear Roles and Responsibilities
6. The Holy Grail of Operational Risk Management: Identifying People Risk Early
7. KRIs Worthy to Report to the Board
8. Critical Processes and Events History Shows Create Heightened 10X Risk
9. Quantifying Operational Risk: Capital Modeling and the Implications to Bank Management

Who will benefit?
The RMA Advanced Operational Risk Management course is a deep discussion of the business of banking from the lens of operational risk management. This course is not Operational Risk Management 101. Therefore, it is assumed that participants have at least a working knowledge of the following Operational Risk Management fundamentals: a) RCSAs/BEICFs; b) Scenario Analysis; c) Loss Data and Capital Modeling.
The people who would benefit most from this course include:

1. Risk managers (2nd line) with at least 3 years of industry experience.
2. Senior managers of lines of business (1st line) with profit and loss responsibilities.
3. Finance, human resources, and technology executives whose role in operational risk management must be clearly defined and understood for banks to accurately calibrate operational risk identification and mitigation.
4. Bank regulators who seek a broader understanding of the history of operational risk management in bank failures and successes.
5. High potential bankers who would benefit from an intense two-day analysis and discussion of the banking industry from an operational risk management perspective.

You will:

• Gain insight into operational risk management's credibility gap.
• Learn how to develop KRIs for macro external event 10X risks.
• Understand velocity and volume changes to the balance sheet and income statement as the leading indicator of operational risk.
• Define clear roles and responsibilities in operational risk management.
• Learn to identify people risk early.
• Quantify operational risk through capital modeling and understand the implications to bank management.

Prerequisites
The course includes pre-reading, PowerPoint presentations, and case studies. Active discussion is expected. The class will include small group work.

Hotels in the Area:

• Sonesta Hotel, 1800 Market Street  Philadelphia, PA 19103, 215-561-7500
• Sofitel Hotel, 120 South 17th Street Philadelphia, PA 19103, 215-569-8300
• Club Quarters, 1628 Chestnut Street  Philadelphia, PA 19103, 215-282-5000  (ask for “RMA” rate) 

Read what past attendees have said about the course:

Rick was amazing!  His wealth of knowledge is unbelievable.  I hope to find another course or conference where he is presenting again in the future
James Whiting, Operational Risk Consultant, Wells Fargo

Coming from a smaller bank, I always wonder if "advanced" anything will be appropriate for my bank's level of maturity.  Advanced Operational Risk Management was definitely beneficial and I learned a lot from the other participants.  Rick is a great instructor and has deep industry knowledge from which to draw.  I would recommend this class even to banks who are just starting to develop their ORM Program.
Christine Cioffi, SVP, Director of Operational Risk, Boston Private Bank & Trust Co.

The RMA Advanced Operational Risk Training Course led by Rick Parsons is a great course to quickly hone your skill as an Operational Risk Management Professional
John Krenitsky, SVP, Chief Compliance Officer, Freddie Mac

Come for the content, stay for the group discussion, and leave with direction
Jeremy J. Kuhl, ERM Program Director, Western Alliance Bank