Operational Risk Management: A Complete Guide

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The number of unethical hackers and cyber attackers increased substantially with the advancement in IT infrastructure. The surge in cyber-attacks is fueled by the rise of the triple extortion ransomware technique used by cyber attackers, where hackers steal sensitive data from organizations and threaten to release it publicly unless clients fulfill the desired demands. Cyber attackers are also targeting organizations’ customers, vendors, or business partners in the same way. Further, cyber attackers adapt their working practices to exploit the shift to hybrid working, targeting organizations’ supply chains and network links to partners to achieve maximum disruption. Moreover, after the emergence of the COVID-19 pandemic, the number of unethical hackers and other cyber attackers increased rapidly. The implementation of cybersecurity risk management solutions is increasing due to the rise in cybersecurity risks. Cybersecurity risk management solutions support the ongoing process of identifying, analyzing, evaluating, and addressing an organization’s cybersecurity threats. Further, these solutions help organizations anticipate and minimize cyber risks, threats, vulnerabilities, and multiple IT compliance requirements. It also supports streamlining cybersecurity efforts to achieve cyber resilience. The cybersecurity risk management tools remove all cyber threats. Therefore, the rising cybersecurity risks across various organizations propel the use of cybersecurity risk management solutions, thereby driving the Europe market growth.

What Are the Benefits of a Strong Operational Risk Management Program?

·         Better C-suite visibility.

·         Better informed business risk-taking.

·         Improved product performance and better brand recognition.

·         Stronger relationships with customers and stakeholders.

·         Greater investor confidence.

·         Better performance reporting.

·         More sustainable financial forecasting.

 

How Does Operational Risk Management Work?

When dealing with operational risk, the organization has to consider every aspect of all its objectives. Since operational risk is so pervasive, the goal is to reduce and control all risks to an acceptable level. Operational Risk Management attempts to reduce risks through risk identification, risk assessment, measurement and mitigation, and monitoring and reporting while determining who manages operational risk. 

These stages are guided by four principles:

·         Accept risk when benefits outweigh the cost.

·         Accept no unnecessary risk.

·         Anticipate and manage risk by planning.

·         Make risk decisions at the right level.