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Operational Risk Management in Financial Services

A Practical Guide to Establishing Effective Solutions

Create value from operational risk management with this practical guide filled with frameworks, examples and industry poll results.

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EAN: 9781398617148

Edition: 2

Published: 03 Sept 2024

Format: 234 x 156

464 pages

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About the book

Technology failures, data loss, issues with providers of outsourced services, misconduct and mis-selling are just some of the top risks that the financial industry faces. Operational risk management is, simply, a commercial necessity.

The management of operational risk has developed considerably since its early years. Continued regulatory focus and catastrophic industry events have led to operational risk becoming a crucial topic on any senior management team's agenda. This book is a practical guide for practitioners which focuses on how to establish effective solutions, avoid common pitfalls and apply best practice to their organizations.

Filled with frameworks, examples and diagrams, this book offers clear advice on key practices including conducting risk assessments, assessing change initiatives and designing key risk indicators. This new edition of Operational Risk Management in Financial Services also features two new chapters reflecting on the future of operational risk management, from cyber risk to GenAI, and guides practitioners in incorporating ESG into their day-to-day strategies. This is the essential guide for professionals looking to derive value out of operational risk management, rather than applying a compliance 'tick box' approach.

About the authors

Elena Pykhova is an award-winning risk expert, author, international trainer and educator. She is founder of boutique risk management consultancy The OpRisk Company, which specializes in board - and executive - level advice on effective risk management practices. She runs public and in-house training courses in the UK and internationally for world-leading organizations such as the Euronext Academy. She is founder of a think tank, Best Practice Operational Risk Forum, former Chair of the Operational Risk Expert Panel for the Association of Foreign Banks, and Director for Education at the Institute of Operational Risk.

Elena Pykhova

- Chapter - 01: Operational risk – Definition and taxonomy;
- Chapter - 02: Operational risk framework and its implementation;
- Chapter - 03: The Three Lines model – Its application to operational risk management;
- Chapter - 04: Operational risk events;
- Chapter - 05: Risk and control self-assessments;
- Chapter - 06: Operational risk assessment of change initiatives;
- Chapter - 07: Key Risk Indicators;
- Chapter - 08: Scenario analysis;
- Chapter - 09: Operational risk appetite;
- Chapter - 10: Operational risk reporting;
- Chapter - 11: Operational risk training and education;
- Chapter - 12: Risk culture;
- Chapter - 13: Embedding and maturity assessment;
- Chapter - 14: Incorporating ESG into operational risk framework;
- Chapter - 15: Operational resilience;
- Chapter - 16: Ref lections on the future of the operational risk discipline;
- Chapter - 17: Appendix 1 – Operational Risk Champion: role description;
- Chapter - 18: Appendix 2 – Example operational risk event reporting template;
- Chapter - 19: Appendix 3 – ORA template;
- Chapter - 20: Appendix 4 – Table of 50 Key Risk Indicators;

Reviews

Josephine Degaita, Head of Group Operational Risk, National Bank of Greece

Written by a renowned educator, this book is an invaluable resource for both experienced and early-career professionals seeking to enhance their skills and practices to foster value-added operational risk management. With a simple and engaging approach, this book aptly recognizes the growing complexity of operational risk activities, offering essential tools and practical examples for navigating this evolving landscape.

Inna Schwartz, Group Chief Risk Officer, Sygnum Bank AG

If you are looking for an all-round guide to operational risk management, whether you are an expert who wants to be challenged or just starting out in this field, this book is a must-have! Elena Pykhova seamlessly navigates you through all you need to know about operational risk and all the while, making it so simple to understand. I encourage everyone to read this book to learn from a top expert in this field.

Manoj Kulwal, Chief Risk & AI Officer, RiskSpotlight

If you can only purchase one book on operational risk management, then I strongly recommend you purchase this book. Elena Pykhova's insightful approach makes this book the best choice for those seeking practical business-oriented solutions.

Daniela Biagi, Head of Academy, Euronext Group

Elena Pykhova teaches and writes in simple, clear and engaging language. This book is a brilliant resource for risk professionals, covering all foundational concepts in a practical and easy-to follow-manner.

Richard Doe, former CEO, Harpenden Building Society

An essential read for all risk professionals and CEOs. This book is the definitive guide to operational risk management in financial services.

Moorad Choudhry, author of The Principles of Banking

Operational risk is a topic that is large and complex in both breadth and depth, making it a particularly challenging area for risk managers to get hold of. Elena Pykhova does a masterful job in bringing all the various strands together in a practically valuable yet accessible way. Very highly recommended!

Susana Gomez Smith, Non-Executive Director, Novo Banco and Leonteq AG

Simply, the most practical and educational guide on operational risk management written by an expert. A refreshingly lively read, with useful examples, valuable industry insights, challenges and good practices. A must-have book for anyone in the industry.

Ellen Brataas, CEO, IIA Norway

This is an excellent book. Elena Pykhova writes with passion and clarity, providing the reader with a simple-to-follow, guided journey through all the components of the operational risk framework. This is a great read for experienced risk professionals and non-professionals alike.

Esteban Olivares Arellano, Partner, Next Consultores, Adjunct Professor Faculty of Economics and Business, University of Chile and Regional Director, PRMIA

A must for risk management professionals. It has clear and direct language, very good examples and recommendations to better cope with the heavy burden and great responsibility that comes with operational risk management in the financial world. Very notable are its recommendations at the beginning of each chapter, together with challenges and good practices, which are valuable for those who work to make things happen in operational risk management.

Nigel Boothroyd, Non-Executive Director, British Arab Commercial Bank

This book is an essential guide for professionals seeking to understand and manage the complexities of operational risk in today's financial services landscape. Crucially, this second edition provides valuable insights into the future of operational risk management and guides professionals into incorporating ESG into day-to-day strategies. A must-read for anyone in the industry.

Victor Palma Sanchez, Head of Enterprise Risk Management and Non-Financial Risk, Banco Santander

Finally, an operational risk management book that successfully combines the theory with the realities of the day-today business environment, through useful examples, diagrams, and a list of good practices. Elena Pykhova has used her extensive risk management career to provide an integrated view of the various risk management framework components

Written by a renowned educator, this book is an invaluable resource for both experienced and early-career professionals seeking to enhance their skills and practices to foster value-added operational risk management. With a simple and engaging approach, this book aptly recognizes the growing complexity of operational risk activities, offering essential tools and practical examples for navigating this evolving landscape.
Josephine Degaita, Head of Group Operational Risk, National Bank of Greece

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