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.
Microsoft outage disrupts structured notes trading
Document-heavy OTC trades upended as term sheets and confirmations languished in outboxes
Could a prediction market bet get you fired by your bank?
Operational risk and resilience in financial data infrastructure: a practitioner-research study of institutional risk systems and digital-asset benchmarking
Can we predict settlement delays and failures? Transaction-level evidence on liquidity and operational frictions
Banks want AML data upgrade to complement US regulatory reform
FinCEN’s proposed overhaul sparks debate on whether it will lead to smarter or weaker supervision
Swiss franc loan losses are a grey rhino for EU consumer finance
Impact on Polish banks exposed a blind spot on modelling legal risk that has wider implications, says mBank CRO Marek Lusztyn
CROs urged to use ‘creative’ stress tests for interconnected risks
Risk Live Asia: AI, cyber security and geopolitics mean faster shock transmission across risk types
Barclays built a system to spot AI agents that might go rogue
Research setup ‘reads the mind’ of LLM-based agents and flags if they’re about to do something risky
Op risk data: Crypto hacks keep coming
Also: Deepfake voice clone cons Intesa division; US FTC ramps up fines. Data by ORX News
An agentic bank? Not so fast
With no clear definition or way to gauge ROI, claims of AI adoption should be taken with a pinch of salt
Canton: has Wall Street found its blockchain?
Network and privacy behind Digital Asset spin-off’s tilt at next-gen settlement
Month-long power glitch hits key Apac trade surveillance tool
Nasdaq’s alert functions were restored, but users say testing and calibration tools still disrupted
Why resilience goes beyond risk at StanChart
Risk Live: Reliability is “a business goal” that can involve difficult trade-offs, says Americas CEO DeFilippo
What happens when AI gets good at your risk management job?
Risk executive Alex Golbin asks how to build a valuable career in risk as agentic AI takes on more analysis
Op risk data: KKR crushes antitrust fine record over pre-merger filing fails
Also: Dealers pay up for Mexican bond-rigging scandal; missing AML checks at UBS. Data by ORX News
From Pillar to Pillar… to post: where now for op risk in Europe?
Experts think enhanced Pillar 2 charge informed by Dora would be more useful than a blunt Pillar 1
From cost centre to growth engine: hard ROI, client trust and the future of CLM in Apac
How Apac banks can move beyond the ‘AI illusion’ to unlock hard ROI
An expert-validated risk assessment framework for bank IT supply chain management
The authors propose and validate an expert-based risk assessment framework to manage IT supply chain risks in the banking sector.
Op risk data: Japanese restaurant payments firm swallows $700m loss
Also: Bank of Baroda fraud filing, Wells’ Ponzi woes, and Swedbank’s Panama Papers payout. Data by ORX News
Banks building GenAI governance in parallel to model risk
Risk Benchmarking: Majority have established AI governance committees, but ownership is fragmented
The evolution of operational risk scenario analysis
How structured scenario analysis paired with AI-enabled challenge can modernise banks’ op risk practices
Red alert: how Nasdaq’s Smarts became surveillance blind spot
Software that looks for shifty trades has been asleep on the job, affecting alerts for hundreds of products
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
Operational risk measurement: integrating the amplification effects of reputational risk
This paper puts forward a means to measure operational risk losses which integrates reputational and operational risks.