Page 94 - Risk Management in current scenario

6. system

7. employment practices and workplace safety

These seven events may result either by one or more factors out of the
four (People, Process, System or external events) factors.

Consequence
Consequence is the loss either in terms of financial loss, reputational loss
or loss of customer impacting new business. The loss is measured in terms
of likelihood and impact. Likelihood represents the possibility that a given
event may occur, while the impact represents its effects. The likelihood
and impact is assessed based on historical information, which could be
coming from internal or external data sources.

In the quantification of operational risk, qualitative and quantitative risk
assessment techniquesare used. Where the data is not quantifiable,
qualitative technique is used.

In the absence of loss data, it is difficult to model losses resulting from
operational risk, therefore statistical application could be challenging.
Therefore, Risk Control Self-Assessment exercise is used where each risks
are assessedfor likelihood and impact against its pre-defined tolerance
limit/risk appetite within business. Control is to be provided to bring the
risk back to limit.

Risk Control Self-Assessment (RCSA)
In operational risk for the purpose of risk identification and risk
quantification,Risk Control Self-Assessment (RCSA) is used. The primary
purpose of RCSA is tohave register of all the operational riskswithin the
business, look at its inherent risk, what controls can be placed so that
the residual risk comes out within the risk tolerance limit of the company.

As discussed above, the impact of the operational risk could be
financial,on customers and or reputational.The inherent risk is assessed

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