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Practical Operational Risk Management - MITPM Conference

Slideshow about Practical Operational Risk Management - MITPM Conference by Eric Tachibana

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Practical Operational Risk Management - MITPM Conference

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  1. Selena Sol presents….. PRACTICAL OP RISK MANAGEMENT A practical summary for the career curious selena@selenasol.com http://www.linkedin.com/pub/eric-tachibana/0/33/b53 http://www.slideshare.net/selenasol

  2. WHY • QUESTION • Who among you would brag to your friends about getting a fun-filled job in • Risk Management • Compliance • Information Security • Audit 1 WHAT 2 WHO 3

  3. WHY I’ve got 3 words for all of you who didn’t raise your hands… 1 WHAT 2 RISK WHO 3 IS

  4. WHY 1 WHAT 2 WHO 3 SEXY!!!

  5. WHY 1 WHAT 2 REVENUE - COST PROFIT = WHO 3

  6. WHY PROFIT = REVENUE - COST 1 • RISK PROTECTS REVENUE • Platform failure stops revenue flow • Platform limitation prevents expansion into new markets • Regulatory Capital tied up and uninvestable • Our stock price tanks due to crash • Customers just don’t trust us • RISK REDUCES COST • We’re fined by regulators • We are inundated with external and internal audits • Civil actions • More resources devoted to fire fighting issues WHAT 2 WHO 3 Risk is sexy because your CEO thinks it’s sexy (read as more jobs, higher profile, more comp)

  7. WHY 1 Sell Business & Strategic Mgmt Market & Credit Risk WHAT 2 Operational Risk Deliver/Build WHO 3 Supply

  8. WHY 1 WHAT 2 WHO INHERENT RISK – CONTROLS = RESIDUAL RISK 3

  9. WHY INHERENT RISK – CONTROLS = RESIDUAL RISK 1 • What are the sources of operational risk? • People • Process • Systems • External events • How do you know where to look for risk? • Standards-setting bodies • Common sense • How do you go about looking for risk? • Formal process to self id issues • Internal & external assessors WHAT 2 WHO 3 Risk is sexy because you get to experience the total firm

  10. WHY INHERENT RISK – CONTROLS = RESIDUAL RISK 1 • What do controls do? • Prevent • Mitigate • Recover • How do you govern controls? • Staff the function • Strategically align risk with culture & values • Prioritize & handle exceptions • Standardize as appropriate • Test • Report • Continuously improve WHAT 2 WHO 3 Risk is sexy because it is really challenging to succeed

  11. WHY INHERENT RISK – CONTROLS = RESIDUAL RISK 1 • What do you do with residual risk? • Remediate it – “Go to Green” • Monitor it • Ignore it (be careful of black swans) • Discover it (don’t forget the unknown) WHAT 2 WHO 3

  12. WHY • From where can you enter Op Risk Mgmt? • From IT • From Operations • From the Front Office • From business or change management • Right out of school • Where can you go to after Op Risk Mgmt? • To IT Management • To Operations Management • To Front Office Risk • To Senior Management 1 WHAT 2 WHO 3 Risk is sexy because it offers you so many career opportunities

  13. RISK = SEXY • MONEY & POWER • EXPERIENCE THE TOTAL FIRM • CHALLENGING WORK • CAREER OPPORTUNITY

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