Operational Risk Management Practices

2016 ◽  
pp. 19-45
Author(s):  
Douglas Robertson
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Operational Risk ◽  
Operational Risk Management

Impact of Ownership and Size on Operational Risk Management Practices: A Study of Banks in India

2017 ◽  
Vol 18 (3) ◽  
pp. 795-810 ◽  
Author(s):  
Deepak Tandon ◽  
Yogieta S. Mehra
Keyword(s):  
Risk Management ◽  
Factor Analysis ◽  
Data Collection ◽  
Management Practices ◽  
Operational Risk ◽  
Test Reliability ◽  
Operational Risk Management ◽  
Data Collection And Analysis ◽  
Loss Data ◽  
The Impact

The financial crisis and resulting failure of large banks worldwide has shaken the entire world. Improper management of operational risk has been touted as one of the reasons for this failure. In light of the rising importance of operational risk management (ORM) in banks, the study explores the range of ORM practices followed by a cross section of Indian banks and compares them with the banks worldwide. The study also analyses the impact of size and ownership of banks on these practices. Reliability analysis using Cronbach alpha model, Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy and Bartlett’s test of sphericity was used to test reliability of questionnaire and justifies the use of factor analysis. Factor analysis was performed to extract the most important variables in ORM. The small size of bank was observed to be a deterrent to deep involvement of operational risk functionaries, collection and usage of external loss data and data collection and analysis. Further, the performance/preparedness of public sector and old private sector banks lagged behind peers in usage of key reporting components, such as risk and control self-assessment (RCSA), key risk indicators (KRI), scenarios, collection and usage of external loss data, data collection and analysis and quantification and modelling of operational risk.

scholarly journals THE EFFECT OF OPERATIONAL RISK MANAGEMENT PRACTICES ON THE FINANCIAL PERFORMANCE IN COMMERCIAL BANKS IN TANZANIA

2016 ◽  
Vol 1 (1) ◽  
pp. 29
Author(s):  
Kerongo Maatwa Meshack ◽  
Rose Wairimu Mwaura
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Commercial Banks ◽  
Management Practices ◽  
Operational Risk ◽  
Operational Efficiency ◽  
Primary Data ◽  
Operational Risk Management ◽  
Insolvency Risk

Purpose: The purpose of the study was to determine the effect of operational risk management practices on the financial performance in commercial banks in TanzaniaMethodology: The research problem was studied by use of a descriptive research design. The population of the study consisted of all commercial banks in Tanzania. The study used the sample size of 34 commercial banks in Tanzania. Therefore all the commercial banks participated in equally. Questionnaires were the primary data collection tool in this study. The data gathered from the respondents shall be analyzed and presented using descriptive statistics.Results: The study found that the three independent variables in the study credit risk, Insolvency risk and Operational efficiency influenced the financial performance for the period under study. Credit risk Insolvency risk   and Operational efficiency influenced commercial banks financial performance for the period of study.Unique contribution to theory, practice and policy: This study therefore recommends that the commercial banks should handle their operations appropriately as the changes in the factors like Insolvency and Credit risk bring about an effect on the profitability of commercial banks hence affecting their financial performance

IT Governance and the Maturity of IT Risk Management Practices

2015 ◽  
Vol 31 (1) ◽  
pp. 59-77 ◽  
Author(s):  
Nishani Edirisinghe Vincent ◽  
Julia L. Higgs ◽  
Robert E. Pinsker
Keyword(s):  
Risk Management ◽  
Boards Of Directors ◽  
Management Practices ◽  
It Governance ◽  
Operational Risk ◽  
Operational Risk Management ◽  
It Risk Management ◽  
Customer Information ◽  
Reporting Structure ◽  
It Risk

ABSTRACT The Securities and Exchange Commission's enhanced disclosure rule on risk oversight, state laws requiring public disclosure of compromised customer information, and high-profile customer information breaches have caused Information Technology (IT) risk management practices to be a major concern for boards of directors and management. The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management (ERM) framework emphasizes the importance of the board's oversight role while also bringing attention to the firm's reporting structure. Consequently, our study examines whether the maturity of IT risk management practices depends on Chief Information Officer (CIO) reporting structure and Chief Executive Officer (CEO)/Chairman duality. We develop a scale to measure strategic and operational maturity under the larger auspice of IT risk management and distribute a survey to high-level IT professionals. Our survey also captures the reporting structure of their firms. Consistent with our hypothesis, we find that the maturity of strategic IT risk management practices are higher when the CIO reports directly to the CEO. However, contrary to expectations, we do not find that operational risk management is more mature when the CIO reports to the Chief Financial Officer (CFO). Instead, operational risk management is higher when the CIO reports to the CEO. For public firms, the maturity of IT risk management practices are higher when the CEO is also the chairman of the board of directors. As C-level officers may have asymmetric access to the board, understanding reporting structures may inform firms, regulators, and interested stakeholders on how well IT risk is managed and factors that affect IT governance.

scholarly journals Effect of Risk Management Practices On Corporate Investment of Financial Institutions in Rwanda: A Case Study of Selected Commercial Banks

2019 ◽  
Vol 4 (4) ◽  
Author(s):  
Emmanuel Byamungu ◽  
Irechukwu Eugenia Nkechi ◽  
Henry Jefferson Ogoi
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Management Practices ◽  
Operational Risk ◽  
Corporate Investment ◽  
Market Risk ◽  
Operational Risk Management ◽  
Strategic Risk ◽  
Strategic Risk Management

Risk management practices are currently a subject of interest and a novel impression beneath research and application by diverse organizations. Nevertheless, there seems much to be debated on this subject in terms of a general strategic risk management practices statement. There is uncertainty like, when there should be a declaration for each principal risk category the organization experiences or should exist a general risk management practices for the organization. A risk management practice is about achieving corporate goals. For many financial institutions (FIs), dual goals exist such as the social and economic perspectives. This study sought to analyze the effect of strategic risk management practices on corporate investment of selected financial institutions in Rwanda. The study aimed at establishing the effect of operational risk management practices, market risk management practices, compliance risk management practices and governance risk management practices on corporate investment in selected commercial banks in Rwanda. The study adopted descriptive research design. The study targeted 95 managers from finance, internal audit, risk compliance and operations departments. The sample size was 77 respondents. The research was conducted using primary and secondary data, which includes survey forms (questionnaires), interviews as well as reports of the targeted institutions. Information for the research were gathered utilizing organized surveys forms that were distributed to the targeted respondents. Narrative information obtained from interviews and open-ended questions in the questionnaire were analyzed using qualitative approaches. Validity and reliability of the instruments were tested using the Cronbach Alpha test retest methods. With the aid of Statistical Package for Social Science version 21.0, both descriptive statistics such as the means, modes, standard deviation, variances and inferential statistics were analyzed. The research revealed that management of operational risk has a constructive effect financial outcomes performance of financial institutions in Rwanda. The study found that there is a correlation between both operational risk management and market risk management and performance of the financial institutions. The research findings revealed that operational risk management (r=0.096, p<0.01), market risk management (r=0.506, p<0.01) and compliance risk (r=0.612, p<0.01) on corporate investments.

scholarly journals Analysis of Impacts of Operational Risk Management Practices on Banks’ Financial Performance: Study of Selected Commercial Banks in Nigeria

2020 ◽  
Vol 9 (1) ◽  
pp. 22-35
Author(s):  
Diekolola Oye
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
Commercial Banks ◽  
Management Practices ◽  
Secondary Data ◽  
Operational Risk ◽  
Multiple Regression Model ◽  
Performance Study ◽  
Operational Risk Management ◽  
The Impact

Increase in losses borne by banks as a result of inadequate operational risk management practices and the adverse impact on banks’ financial performance has been a major concern to bank management and regulators. This study analysed the impact of operational risk management practices on the financial performance of commercial banks in Nigeria. 10-years (2008 - 2017) secondary data extracted from audited financial statements of selected commercial banks in Nigeria was used for the study. The data was analysed using the Linear Multiple Regression Model. The results showed that there is a positive relationship between operational risk management and the financial performance of banks. The findings revealed that sound operational risk management practices impact positively on the financial performance of banks. We, therefore, recommend that banks’ management should deploy adequate resources towards understanding operational risk to ensure sound operational risk management and improved financial performance of banks.

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