Operational Risk may arise due both to internal and external factors.
Internal factors which cause the arising of an operational risk include:
- Deficiencies in the distribution of duties within the organizational structure of the Bank, between various employees and departments, rules and procedures of implementation of banking operations and other transactions, their documentation and recordation;
- Failure of employees of the Bank to comply with prescribed rules and regulations;
- Inefficiency of internal control within the Bank;
- Accidental or deliberate actions of the Bank’s employees to the detriment of the Bank;
- Faults and errors in the operation of systems and equipment.
External factors which cause the arising of an operational risk include:
- Accidental or deliberate actions of physical persons and / or legal entities to the detriment of the Bank;
- Faults and errors in the operation of systems and equipment being outside of control of the Bank;
- Negative external factors being outside of control of the Bank.
Management of operational risks includes the following stages:
- Determination of an operational risk;
- Evaluation of an operational risk;
- Control of an operational risk, or bringing an operational risk to minimum;
- Pursuing an operational risk.
The following methods may be conducive to achieving the goals and purposes of the management of operational risks:
- Thresholds system (limits);
- Authorities and decision making system;
- Information system;
- Monitoring system;
- Control system.