Aims
This is an intensive course on Operational Risk Management & Mitigation – from assessing the operational risks to how to implementing a working, viable operational risk management system. Aimed at the financial services industry this course explores the Operational Risk Management (ORM) function and mitigation requirements as mandated in the Basel Accords.
A key objective of this course is to move the participants beyond the operational risk compliance requirements set down in the Basel Accords to an understanding of managing operational risk as a value added proposition that can be instrumental in increasing the profitability of the bank while at the same time improving its structural strength.
Now in 2014, the ongoing continuum of headline-grabbing operational risk incidents at banks, other financial institutions and even regulators continue to keep the issue of operational risk management at the top of agendas of CEO’s , CRO’s, Risk Managers and Internal & External Auditors alike.
These incidents are wide ranging and flow from bank ATM collapses, bank operating system failures, regulatory settlements in the ongoing US sub-prime mortgage saga, rogue traders and the connected risk managers who either missed or were willfully blind to all the warning signs.
As the size and complexity of financial institutions have increased, so too have the challenges of understanding and reducing operational risks down to truly manageable levels. Increased regulatory concern and scrutiny have also increased the cost of operational risk events in the shape of outright financial loss, regulatory fines and declining customer confidence
ORM is an effective tool for not only maintaining but increasing, bank profits, shareholder value, public perceptions and goodwill.
Executed properly, improvements in ORM can lead to substantial financial, reputational and regulatory benefits – all this adds to increased profitability, greater financial stability and improved customer satisfaction – in short, a better safer bank/ financial institution.
But to achieve these gains, financial institutions must apply a consistent and comprehensive approach to managing their operational risks. They must also understand that this approach is fundamentally different from the approaches that they use in managing market, credit and liquidity risks.
"Bad" ORM has a severely negative effect on financial institutions in four very clear ways;
- Actual operational risk losses are a direct hit to the income statement. Equally the massive fines being paid have the same effect.
- The market punishes companies, via the stock price, for operational risk failures. This loss of value could well exceed the actual financial loss experience by the risk event in the first place.
- Lowered Credit Ratings, which raises the institutions cost of borrowing money in the marketplace.
- Operational risk failures can vastly increase the cost of compliance by raising the level of regulatory scrutiny and complexity not to mention substantial penalties.
All too often banks have seen the need to effectively manage their operational risks as simply an issue of complying with what the bank regulator requires, in this case the operational risk requirements of the Basel Accords, rather than a disciplined process in its own right, that serves to not only ensure a banks survival but which can, in the long run, contribute to that bank’s financial fortune.
Implementing an effective ORM routine (“Good” Operational Risk Management) is a complex process. At its core is an understanding of what operations risk is and how it can be managed.
This course is an intensive introduction to operational risk management and mitigation. It is designed to provide a practical “hands-on” approach to participants which will furnish them with all the tools and techniques they need to begin implementing what they have learned as soon as they return to the office.
The underlying course philosophy is to move the participants beyond the largely theoretical international compliance requirements for operations risk (specifically those contained in the Basel Accords), and into an understanding of the practice of operations risk management and an ability to actually implement these procedures.
Operations Risk -
Active Management & Compliance
Which organizations should attend?
- Commercial Banks
- Central Banks
- Investment Banks
- Bank Regulators
- Asset Management Firms’ Representatives
- Pension Funds
- Hedge Funds
- Leasing Companies
- Insurance Companies
- Fund Managers
- Other Financial Institutions
Who should attend the course?
- Financial Officers
- Risk Officers
- Internal Auditors
- Operational Risk Managers
- Compliance Officers
- Staff with roles and responsibilities in operational risk in risk management departments, businesses and central departments
- All front-, middle- and back-office staff in operational roles
- This course is not restricted to management staff alone but to all staff who are required to be “Operational Risk” aware
Objectives
The objectives of this training course is to provide all staff, irrespective of whether they work in the front-, middle- or back-office, with a sound foundation in the theory and practice of ORM. This training is provided in a practical "hands-on" manner that allows them to implement what they have learned easily and effectively the minute they return to the office.
What this course covers
This course provides a complete structured package for learning in all main aspects of the subject of managing operational risk under the Basel Accords. It will enable participants to prepare and manage the planning and implementation of operational risk management processes in their bank/ financial institution or firm.
Key objectives and learning outcomes
The aim of the course is to provide:
- An understanding of risk in all its facets
- What the Basel Accords say about operational risk and its mitigation
- An understanding of operational risk techniques for assessing, managing and mitigating operational risk
- A link between ORM theory & practice
- A clear "road-map" on how to implement an ORM structure in practice in a banking organization.
Methodology
This training course uses a combination of prepared tuition, examples, discussions, exercises and case studies. Most importantly it will offer participants, opportunities to share experiences and plan work within small working groups, providing practice in the application of the techniques and tools generating active participation.
AGENDA:
| Day One (8:30 AM – 5:30 PM) | Day Two (8:30 AM – 5:00 PM) | ||
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Registration Process: 8:30 AM – 9:00 AM Session Start Time: 9:00 AM THE WHY, HOW & WHAT OF OPERATIONAL RISK
All Basel material is current and up-to-date in terms of current BIS developments
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IMPLEMENTATION
We examine the BIS categories of operation risk in terms of specific examples. The categories covered are:
New technologies and practices are changing the nature of bank operational risk in many dramatic ways. In this section we explore a selection of current “risk themes” and get to grips with how the operations risk profile is changing in the constant struggle between profit and prudence. This is a fast changing area and this section of the course is being constantly updated.
This case study on a recent event provides an in-depth examination of operational risk management failures resulted in substantial losses to UBS. We look at what went wrong and why and what lessons can be learned from this series of events. Why and how were the lessons of the 2007 SocGen event ignored? Included in this case study we have a special section on rogue traders generally in which we deal with issues such as; |
Meet Your Instructor
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Stanley Epstein Banking, Payments, Operational Risk & Back Office Specialist and Bank Trainer Stanley Epstein has had extensive experience in banking and IT specifically the operations, payments, RTGS and the operational risk aspects of banking in the UK, Europe, the USA, Australia and Southern Africa. His bank-operations, payments systems, operational risk and clearing house experience is wide ranging and includes working closely with organisations such as UNCITRAL, Deutsche Bank and CHIPS in New York; APACS, British Bankers Association, CLS and Barclays Bank in London; Crédit Agricole in France; UBS and Credit Suisse in Switzerland, the central bank in the Netherlands; Alpha Bank in Greece; the central bank in Romania; the central bank in Kazakhstan; Bank Leumi and the central bank in Israel; the Standard Bank, Clearing Bankers Association; Bankserv and the central bank in South Africa and ANZ and Commonwealth Bank in Australia. Commencing his career at the Standard Bank of South Africa he gained a thorough grounding in all aspects of banking ranging from the bank’s branch system, back-office payments processing. He was also closely involved in the development of electronic banking at the Standard Bank. At a banking industry level he was involved in the creation and development of STRATE (Central Securities Depository in South Africa dealing with the dematerialization, clearing and settlement of all financial instruments in that country. He also served as Vice Chairman of the South African Clearing Bankers Association’s ERAG Group (an interbank payments/operations risk initiative established to identify & eliminate operational, legal and other risks in electronic payments) and later as Chairman of the Payments Association of South Africa Operational Risk Committee. On leaving South Africa he joined Fundtech Corporation, a leading provider of financial technology based in the US. Stanley has a Master’s degree in Economics which he earned with a dissertation on Financial Innovation and a Bachelor of Commerce degree in Accounting. |
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Testimonials
This was a well-organized event. The speaker was very informative and the seminar was covering great real life examples that kept everyone engaged. ComplianceOnline is very helpful and it has a professional approach in conducting regulatory trainings.
- Third Party Vendor Management Lead, JPMorgan Chase
The seminar was very informational and the material is very useful in implementing risk assessment program in organizations.
- Cash Management Operations Assistant Manager, Flushing Bank
Instructor was highly knowledgeable and the subjects were well chosen.
- Audit Supervisor, Flushing Bank
Speaker did a great job and topics related to operations risk structures and frameworks were highly useful.
- Manager, Discover Home Loans, Inc.
This was a very informative seminar. The presenter had thorough knowledge on the subject. He was providing good examples on each topic as he went through the program.
- Deposit Operations Manager, AVP, Flushing Bank
It was a good introduction into risk assessment.
- AVP, Risk Management, MB Financial Bank
Presenter was very knowledgeable on the topic.
- Assistant Vice President/Branch Operations Team Leader, Flushing Bank
Real world examples discussed during the seminar was beneficial.
- VP of Operations, Southwest Securities
This seminar was very informative and the speaker was very knowledgeable. Case studies discussed were highly useful.
- Assistant Security Officer, Flushing Bank
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