Operational risk
What is it?
It is the risk associated with deficiencies or failures in a company’s processes, procedures, systems, or operational resources. These failures can lead to financial losses, operational disruptions, damage to reputation, or non-compliance with regulations. Operational risk encompasses a wide range of situations, such as human errors, technological failures, internal fraud, natural disasters, or inefficiency in resource management.
In the business context, this risk is crucial, as it can affect the continuity of daily operations and disrupt relationships with customers, suppliers, and other stakeholders. Operational processes are the core of businesses, and any significant disruption can compromise the financial and operational stability of the organization.
Key aspects to consider
Operational risk can originate from different areas of a company, from the technological system used to manage transactions to human resource management. Companies must implement internal controls and risk management procedures to identify, assess, and mitigate these risks before they escalate into serious threats.
Cybersecurity is one of the main aspects to consider within operational risk, especially in a digital environment where cyberattacks can compromise critical systems and data. Additionally, continuous employee training and process optimization are key strategies to minimize the operational risk associated with human failures.
It is crucial for companies to have a well-structured contingency plan that mitigates the consequences of any operational failure, along with maintaining regulatory oversight to comply with regulations and avoid potential penalties or damage to their reputation.