Operational risk
WHAT IS THIS? Operational risks are those arising from people, processes and systems – the biggest form of exposure for many industries, but one that was neglected by financial firms until the collapse of Barings Bank in 1995. It was added to the Basel capital framework in 2004, but attempts to model operational risk were dealt a heavy blow by the huge, unforeseen losses suffered by banks in the aftermath of the financial crisis.
Op risk data: Pentwater pays up for taking Avis shares for a spin
Also: Romania’s Robor cop gets tough on benchmark rigging; Wamco’s cherry-picking squashed. Data by ORX News
Former MI6 chief urges AI slowdown
Risk Live: Other AI firms will be “in exactly the same space” as Anthropic’s Mythos, warns Moore
Break down silos to manage geopolitics – risk managers
Risk Live: Experts says scenario planning helps identify who has information needed in a crisis
AI autonomy may redefine risk management roles
Risk Live: Machine validation of autonomous processes may emerge “relatively soon”, EIF risk chief says
Banks insure against cyber risk, but rarely claim
Risk Benchmarking study finds big banks aggressively negotiating on cost of cover, and seeking offsets to Pillar 2 capital
Four in five banks use AI to manage op risks
Risk Benchmarking: Cyber risk use cases growing; governance and ROI doubts give some pause
Build, or buy: banks still don’t love their GRC vendors
Risk Benchmarking study finds a record number of firms reviewing tech provision for top op risks, amid touted wave of AI-led self-builds
EU banks welcome high-risk systems breather from delay in AI act
But chatbot transparency still applies from August, requiring deployers to disclose use to customers
On cyber risk, tech debt is big banks’ top challenge
Risk Benchmarking: Fragmented stacks make identifying vulnerabilities harder; manual workarounds increase human errors
Half of banks use scenarios to set third-party Pillar 2 capital
Risk Benchmarking study finds resilience risk less widely covered than cyber and IT disruption, but more formalised where scenarios exist
Portway leaves Barclays, destination unknown
Group operational risk head departs after 14 years at firm
Second line seeks to stamp its authority on AI risk
Risk Benchmarking study finds fragmented accountability for AI risk among banks, and most are short of controls to contain it
Everything is connected: Santander’s US CRO shuns siloed thinking
Rise of AI intensifies links between fraud, cyber, third-party and other operational risk categories
Op Risk Benchmarking 2026: explore the data
View interactive charts from Risk.net’s 61-bank study, covering risk appetite breaches, controls, scenario analysis, GRC tech and regulation
Op risk data: HSBC hit with $400m external fraud loss
Also: China’s unlicensed trading clampdown; SocGen’s insurance mis-selling woes. Data by ORX News
Appetite breaches climb for top op risks
Risk Benchmarking: Low tolerance and heightened threat environment combine to test banks’ limits for cyber, resilience, third-party risk
How gatecrashers could spoil the tokenisation party
Blockchain can curb settlement risks, but that could come at the expense of new third-party risks
Op Risk Benchmarking: Banks seek a home for AI risk
Risk.net’s 2026 study sees record participation and collective unease, as banks race to incorporate AI into op risk frameworks
Third parties cause third of ICT failures, Dora report shows
First annual report shows IT risk is highly interconnected and international, say EU regulators
Erba myth: will US banks choose new capital measure?
B3E gives US banks a dilemma – adopt expanded risk-based approach, or a new standardised alternative
Contract negotiation tops tech sovereignty for banks in Asia
Regulatory pressure is rising, but industry still focused on service agreements with third parties