RSK4801
ASSIGNMENT 2 2025
UNIQUE NO.
DUE DATE: 2025
, Operational Risk Management
Question 1 (10 Marks): Discuss the benefits of a sound operational risk report
A sound operational risk report is a vital tool in ensuring that a bank operates efficiently,
ethically, and within regulatory expectations. One of its main benefits is that it helps
inform key stakeholders — such as the Board, executive leadership, regulators, and
investors — about the effectiveness of the bank’s risk management framework. Through
accurate reporting, they are able to understand the bank’s exposure to operational risks,
such as fraud, regulatory breaches, or system failures.
Another benefit is that it enhances decision-making. Reliable and well-structured risk
reports provide data that supports strategic and operational decisions. For example, if a
report shows high frequency and severity in cybersecurity attacks, the Bank may decide
to invest more in digital security and staff training.
It also helps improve transparency and compliance. Regulatory bodies require detailed
risk information to assess whether the bank is managing risks responsibly and within
defined limits. A good operational risk report shows compliance with regulatory
frameworks and internal risk appetites, which fosters trust.
Such reports contribute to proactive risk management. By tracking trends and
highlighting emerging risks, the Bank can act early to prevent losses. For example,
identifying rising internal fraud or third-party dependencies can trigger process
improvements.
Sound operational risk reporting builds a strong risk culture within the institution. It
reinforces ethical standards, promotes accountability, and ensures that risk awareness
is embedded at all levels.
Question 2 (15 Marks): 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
, Operational Risk Management
Question 1 (10 Marks): Discuss the benefits of a sound operational risk report
A sound operational risk report is a vital tool in ensuring that a bank operates efficiently,
ethically, and within regulatory expectations. One of its main benefits is that it helps
inform key stakeholders — such as the Board, executive leadership, regulators, and
investors — about the effectiveness of the bank’s risk management framework. Through
accurate reporting, they are able to understand the bank’s exposure to operational risks,
such as fraud, regulatory breaches, or system failures.
Another benefit is that it enhances decision-making. Reliable and well-structured risk
reports provide data that supports strategic and operational decisions. For example, if a
report shows high frequency and severity in cybersecurity attacks, the Bank may decide
to invest more in digital security and staff training.
It also helps improve transparency and compliance. Regulatory bodies require detailed
risk information to assess whether the bank is managing risks responsibly and within
defined limits. A good operational risk report shows compliance with regulatory
frameworks and internal risk appetites, which fosters trust.
Such reports contribute to proactive risk management. By tracking trends and
highlighting emerging risks, the Bank can act early to prevent losses. For example,
identifying rising internal fraud or third-party dependencies can trigger process
improvements.
Sound operational risk reporting builds a strong risk culture within the institution. It
reinforces ethical standards, promotes accountability, and ensures that risk awareness
is embedded at all levels.
Question 2 (15 Marks): Briefly discuss the operational risk factors and allocate
the list of operational risks mentioned in the case study to each risk factor
