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Operational risk covers losses from failed processes, systems, people, or external events. The concept focuses on identifying, assessing and managing non-financial risks at organizational level. Metrics and regular tests validate controls.
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Operational risk is the risk of loss or disruption caused by inadequate or failed internal processes, people, systems, or external events.
The term emerged in banking to capture risks beyond market and credit risk. The Basel frameworks and the EU Capital Requirements Regulation turned it into a formal risk discipline; it is now also used for process, technology, and outage risks in other sectors.
Treat a service as a chain of people, procedures, and technology. At each link, ask what can fail, what the impact would be, and which controls reduce likelihood or harm. Events are recorded, assessed, treated through controls, and used for learning after incidents.
An event or failure chain that can affect performance, assets, compliance, or security.
A preventive or detective measure that reduces risk or makes its occurrence visible.
The risk remaining after controls, which still requires an explicit treatment decision.
Operational risk connects risk analysis with practical improvements to processes, systems, and accountability. It supports prioritizing controls and increasing resilience without treating every possibility equally.
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