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.
Top 10 op risks: AI upends risk taxonomies
AI risk enters annual poll in fifth, but firms split over treating it as a standalone risk or a cross-cutting driver
Top 10 op risks 2026: Cyber stays top, AI risk enters at fifth
Third-party and outsourcing risk climbs to third; fraud and fincrime edge out geopolitical risk
Deutsche Bank CRO’s year of living dangerously
Marcus Chromik explains his approach to geopolitical risk, operational resilience and AI adoption
CME-FICC cross-netting terms fuel clashes
Hedge funds worried by CCP powers to suspend arrangement; clearing members say it’s standard practice
Industrialising the challenge process: AI in operational risk scenario analysis
How structured modelling and AI could help industrialise the challenge process
Op risk data: HK gets tough on takeover in $200m takedown
Also: Bank staff steal state funds in India; Vanguard settles US net zero lawsuit. Data by ORX News
CRO view: Emerging risks in the age of AI
The risk agenda is shifting beyond market and credit volatility towards operational resilience, AI governance and culture
The loneliness of the model risk manager
Boards may see them as a drag on innovation; risk functions need to show they embrace efficiency
CME outages hit eight-year high in Q4
Operational failures totalling 8.5 hours most severe since 2017
Big banks love their climate vendors; small banks, not so much
Risk Benchmarking: Lenders with blue-chip loan books more likely to favour climate tools, research finds
Mob rule: populism’s rise pits banks against the people
Trump and fellow mavericks are reshaping politics, leaving banks scrambling to adjust to new and unpredictable risks
EU clearing houses pressured to diversify cloud vendors
CROs and regulators see tech concentration risk as a barrier to operational resilience
Esma won’t soften regulatory expectations for cloud and AI
CCP supervisory chair signals heightened scrutiny of third-party risk and operational resilience
Repo market exposed to $100 billion-plus cyber tail risk, OFR warns
Concentration and time-of-day vulnerabilities amplify impact of extreme outcomes
BPI says SR 11-7 should go; bank model risk chiefs say ‘no’
Lobby group wants US guidance repealed; practitioners want consistent model supervision and audit
At BNY, a risk-centric approach to GenAI
Centralised platform allows bank to focus on risk management, governance and, not least, talent in its AI build
Cyber insurance premiums dropped unexpectedly in 2025
Competition among carriers drives down premiums, despite increasing frequency and severity of attacks
Op risk data: Kaiser will helm half-billion-dollar payout for faking illness
Also: Loan collusion clobbers South Korean banks; AML fails at Saxo Bank and Santander. Data by ORX News
The digital sentinel: artificial intelligence and the mitigation of corporate litigation risk
The authors investigates relationships between strategic AI adoption and corporate litigation risk, finding that increased strategic adoption leads to a net reduction in this form of risk.
How geopolitical risk turned into a systemic stress test
Conflict over resources is reshaping markets in a way that goes beyond occasional risk premia
Fed pivots to material risk – but what is it, exactly?
Top US bank regulator will prioritise risks that matter most, but they could prove hard to pinpoint