In the past few years, financial institutions have been through an intense period of change that has greatly increased the potential for operational risk. Increased regulation, mergers and acquisitions, internal restructuring and changes to systems and technology bring management up against a potential minefield of risks and issues.

Operational risk includes hidden dangers that do not fall under the umbrella of market or credit risk:

• Failures arising from inadequacies in people, processes, and technology
• External threats arising from disastrous events.

The way financial sector organizations manage these risks is under greater scrutiny than ever before (in this respect, Basel III framework is a comprehensive set of reform measures to strengthen the regulation, supervision and risk management of the banking sector), as they are liable to shareholders, regulators, and other stakeholders.

KPMG in Greece is one of the leading providers of operational risk management advisory services and has extensive experience of delivering a wide range of strategies to clients in the financial sector. This includes diagnostic and regulatory compliance reviews, benchmarking studies, developing risk management frameworks, and setting up and supporting the risk management function.

KPMG’s operational risk services include:

Operational risk strategies
We can help you define your risk appetite, develop operational risk management strategies and objectives, and measure your performance against these objectives.

Risk categorization
We advise on developing robust operational risk categorization models, defining the boundaries between each area of risk, and implementing processes for mapping risks to specific categories.

Risk management structures
We work with clients to:

• Develop their operational risk management organization structures
• Define roles, responsibilities and the inter-relationship between business areas, risk functions, and committees
• Define internal audit and other audit functions.

Risk identification and assessment

We help clients to identify, assess and manage operational risk using risk profiling techniques, a variety of self-assessment approaches, loss data and scenario based quantification approaches and risk and control databases. We can also help you develop specific components of your control frameworks, such as business contingency planning and risk transfer through insurance.

Risk management information
We can help you develop effective processes to collate and analyze underlying data. This might include the reporting of risk and control profiles, operational risk loss and incident and exception reports, as well as a variety of risk-related performance indicators.