Introduction

Operational Risk Management (ORM) is a crucial process that helps organizations identify, assess, and mitigate risks associated with their day-to-day operations. According to a survey by the Institute of Operational Risk, 71% of organizations consider ORM to be a key component of their overall risk management framework. In this blog post, we will delve into the job responsibilities of Operational Risk Management and explore the various roles and responsibilities involved in this critical process.

Understanding Operational Risk Management

Operational Risk Management is a holistic approach that encompasses the identification, assessment, monitoring, and mitigation of operational risks. Operational risks can arise from various sources, including people, processes, technology, and external events. The primary objective of ORM is to minimize the likelihood and impact of operational risks on an organization’s overall performance and reputation.

According to a study by the Basel Committee on Banking Supervision, operational risks can account for up to 20% of an organization’s total risk exposure. Therefore, it is essential for organizations to have a robust ORM framework in place to manage and mitigate these risks effectively.

Job Responsibilities in Operational Risk Management

Operational Risk Management involves a range of job responsibilities that require specialized skills and expertise. Some of the key job responsibilities in ORM include:

Risk Identification and Assessment

Risk identification and assessment are critical components of the ORM process. This involves identifying potential operational risks, assessing their likelihood and impact, and prioritizing them based on their severity. According to a survey by the Risk Management Society, 60% of organizations use a risk assessment framework to identify and prioritize operational risks.

Some of the key responsibilities of risk identification and assessment include:

  • Conducting risk assessments to identify potential operational risks
  • Developing and maintaining a risk register to track and monitor operational risks
  • Prioritizing operational risks based on their likelihood and impact

Risk Monitoring and Review

Risk monitoring and review are essential components of the ORM process. This involves continuously monitoring operational risks and reviewing the effectiveness of risk mitigation strategies. According to a study by the Institute of Internal Auditors, 70% of organizations conduct regular risk reviews to ensure the effectiveness of their ORM framework.

Some of the key responsibilities of risk monitoring and review include:

  • Continuously monitoring operational risks to identify changes in risk exposure
  • Reviewing the effectiveness of risk mitigation strategies and making recommendations for improvement
  • Conducting regular risk reviews to ensure the ongoing effectiveness of the ORM framework

Risk Mitigation and Control

Risk mitigation and control are critical components of the ORM process. This involves developing and implementing risk mitigation strategies to minimize the likelihood and impact of operational risks. According to a survey by the Risk Management Society, 55% of organizations use risk transfer strategies to mitigate operational risks.

Some of the key responsibilities of risk mitigation and control include:

  • Developing and implementing risk mitigation strategies to minimize the likelihood and impact of operational risks
  • Identifying and implementing control measures to prevent or minimize operational risks
  • Continuously monitoring and reviewing the effectiveness of risk mitigation strategies

Training and Awareness

Training and awareness are essential components of the ORM process. This involves educating employees on operational risks and the importance of risk management. According to a study by the Institute of Operational Risk, 80% of organizations provide regular training and awareness programs to employees on operational risk management.

Some of the key responsibilities of training and awareness include:

  • Developing and delivering training programs to educate employees on operational risks and risk management
  • Conducting regular awareness campaigns to promote the importance of operational risk management
  • Continuously monitoring and evaluating the effectiveness of training and awareness programs

Conclusion

Operational Risk Management is a critical process that helps organizations identify, assess, and mitigate operational risks. The job responsibilities of ORM involve a range of specialized skills and expertise, including risk identification and assessment, risk monitoring and review, risk mitigation and control, and training and awareness. By understanding these job responsibilities, organizations can develop a robust ORM framework that minimizes the likelihood and impact of operational risks on their overall performance and reputation.

As we conclude this blog post, we invite you to share your thoughts and experiences on Operational Risk Management. Leave a comment below and let us know how you manage operational risks in your organization.