RSK4801
ASSIGNMENT 2 2025
UNIQUE NO.
DUE DATE: 2025
, RSK4801 Assignment 2 2025: Operational Risk Management
Question 1: Discuss the benefits of a sound operational risk report
A sound operational risk report is essential for informing stakeholders about a bank's
operational risks, enhancing decision-making, and ensuring regulatory compliance. One
of the key benefits is that it provides transparency into the bank’s risk profile and control
environment, which builds trust with stakeholders, including shareholders, regulators,
and clients (Young & Baer, 2019).
Furthermore, it aids in the early identification of risk trends and exposures. This allows
the institution to proactively mitigate threats such as fraud, system failures, or employee
misconduct. Effective risk reporting helps banks to align their operations with their
strategic objectives by keeping risk levels within the approved appetite (Basel
Committee on Banking Supervision, 2011).
Another benefit is improved communication across all levels of the organisation. A
sound risk report ensures that management and the board are equipped with accurate
information to make informed decisions. This supports the embedding of a risk-aware
culture and reinforces accountability and ethical conduct among employees (Institute of
Risk Management [IRM], 2020).
Operational risk reports also assist with compliance. Regulatory authorities require
institutions to submit accurate and comprehensive risk reports. By doing so, banks
avoid penalties and demonstrate their commitment to sound governance practices
(Standard Bank Group, 2021).
Question 2: Briefly discuss the operational risk factors and allocate the list of
operational risks mentioned in the case study to each risk factor
ASSIGNMENT 2 2025
UNIQUE NO.
DUE DATE: 2025
, RSK4801 Assignment 2 2025: Operational Risk Management
Question 1: Discuss the benefits of a sound operational risk report
A sound operational risk report is essential for informing stakeholders about a bank's
operational risks, enhancing decision-making, and ensuring regulatory compliance. One
of the key benefits is that it provides transparency into the bank’s risk profile and control
environment, which builds trust with stakeholders, including shareholders, regulators,
and clients (Young & Baer, 2019).
Furthermore, it aids in the early identification of risk trends and exposures. This allows
the institution to proactively mitigate threats such as fraud, system failures, or employee
misconduct. Effective risk reporting helps banks to align their operations with their
strategic objectives by keeping risk levels within the approved appetite (Basel
Committee on Banking Supervision, 2011).
Another benefit is improved communication across all levels of the organisation. A
sound risk report ensures that management and the board are equipped with accurate
information to make informed decisions. This supports the embedding of a risk-aware
culture and reinforces accountability and ethical conduct among employees (Institute of
Risk Management [IRM], 2020).
Operational risk reports also assist with compliance. Regulatory authorities require
institutions to submit accurate and comprehensive risk reports. By doing so, banks
avoid penalties and demonstrate their commitment to sound governance practices
(Standard Bank Group, 2021).
Question 2: Briefly discuss the operational risk factors and allocate the list of
operational risks mentioned in the case study to each risk factor
