By developing an Operational Risk program that focuses not only on the regulatory directive but also the underlying business issues the following can be achieved;

• Lowering the capital charge around
  • Expected Losses
  • Unexpected Losses
  • Extreme Loss
• Adherence to Pillar 2 supervision which can act as conduit for improved management information/ branch supervision
• Improve Operational Efficiency
• Enforcement of SLAs
• Lower actual resultant losses through the use of predictive analysis
• Reduce infrastructure and people costs
• Highlight areas for increase revenue opportunity
• Aid in re-pricing offerings as a result of Operational Loss and profitability information
• Reduce strategic and reputational risks

Services

Crest Rider offers the following services around Operational Risk;

• Development of Group and Line Operational Risk strategy
• Design and implementation of
  • Loss Database,
  • Key Risk Indicators,
  • Scorecards,
  • Self-Assessments
• Vendor package selection

Operational Risk – Next Generation Solution

In addition to the services described Crest Rider is working with technology vendors, system integrators and clients to produce the next generation of Operational Risk solutions designed to achieve the benefits outlined above.

The NextGen solution;

• Uses a fundamentally different approach to existing offerings with emphasis placed upon prevention rather than measurement of losses
• Is an integrated, modular and flexible solution which is adaptive and non-intrusive in nature
• Uses adapters, rules-engines and workflow tools to facilitate both manual and automatic capture of KRIs, Self-Assessments and Loss events including losses, near misses and the ability to alert users of potential loss, or risk, events (predictive analysis)
• Enables scenario generation through rules engines and Bayesian Belief Networks designed to facilitate predictive analysis for potential failures/ losses
• Has the capability to self-police information gathered from multiple sources using corroborative analytics developed using rules engines and Bayesian nets coupled with intuitive analysis provided by powerful information visualization tools
• Has sophisticated modeling tools available allow for capital modeling, stress testing, back testing and simulation
• Adheres to the principles of Pillar 2 requirements by placing information at the hands of all managers throughout an organization through portal technology and powerful reporting and visualization tools
• Forms the foundation for an Enterprise Risk Management solution
• Keeps with the Crest Riders tradition of adaptation to business needs through the use of rules engines and other components of the solution which are designed to be adapted for other regulations such as: SOX, Branch Supervision, AML, KYC….

As the solution (shown below) is modular the client has the ability to select which elements are needed for their business and substitute in existing packages or solutions.