,RSK4801 Assignment 2 (COMPLETE
ANSWERS) Semester 1 2025 – DUE July 2025;
100% correct solutions and explanations.
RSK4801: Region Bank Operational Risk Management Report
Introduction
In the post-COVID-19 economic landscape, financial
institutions such as Region Bank face heightened operational
risks driven by environmental instability, technological
disruption, and regulatory changes. A comprehensive
operational risk report is vital to inform stakeholders about
the institution's risk exposure, resilience measures, and
compliance with regulatory frameworks. This report addresses
four key components related to Region Bank’s risk
management approach for the 2021 reporting period. These
include the benefits of a sound operational risk report,
classification of operational risk factors, the Risk and Control
Self-Assessment (RCSA) process, and the roles of the three
lines of defence in managing risk.
Question 1: Benefits of a Sound Operational Risk Report
(10 marks)
, A sound operational risk report plays a critical role in a
financial institution’s governance and strategic alignment. The
key benefits are:
1. Enhanced Decision-Making
It equips senior management and the Board with
accurate and timely information, enabling informed
decision-making and risk-based prioritisation.
2. Regulatory Compliance
By aligning with international standards like Basel II/III, a
robust risk report ensures the Bank meets regulatory
requirements and avoids penalties.
3. Early Risk Detection
It serves as an early warning tool by identifying trends or
emerging threats (e.g., ransomware attacks or ESG gaps)
that require mitigation.
4. Promotes Accountability
Clear delineation of risks and responsible parties fosters
accountability and ownership across all organisational
levels.
5. Supports Capital and Treasury Management
Insight into operational risk exposure assists in capital
adequacy planning, stress testing, and liquidity
management.
ANSWERS) Semester 1 2025 – DUE July 2025;
100% correct solutions and explanations.
RSK4801: Region Bank Operational Risk Management Report
Introduction
In the post-COVID-19 economic landscape, financial
institutions such as Region Bank face heightened operational
risks driven by environmental instability, technological
disruption, and regulatory changes. A comprehensive
operational risk report is vital to inform stakeholders about
the institution's risk exposure, resilience measures, and
compliance with regulatory frameworks. This report addresses
four key components related to Region Bank’s risk
management approach for the 2021 reporting period. These
include the benefits of a sound operational risk report,
classification of operational risk factors, the Risk and Control
Self-Assessment (RCSA) process, and the roles of the three
lines of defence in managing risk.
Question 1: Benefits of a Sound Operational Risk Report
(10 marks)
, A sound operational risk report plays a critical role in a
financial institution’s governance and strategic alignment. The
key benefits are:
1. Enhanced Decision-Making
It equips senior management and the Board with
accurate and timely information, enabling informed
decision-making and risk-based prioritisation.
2. Regulatory Compliance
By aligning with international standards like Basel II/III, a
robust risk report ensures the Bank meets regulatory
requirements and avoids penalties.
3. Early Risk Detection
It serves as an early warning tool by identifying trends or
emerging threats (e.g., ransomware attacks or ESG gaps)
that require mitigation.
4. Promotes Accountability
Clear delineation of risks and responsible parties fosters
accountability and ownership across all organisational
levels.
5. Supports Capital and Treasury Management
Insight into operational risk exposure assists in capital
adequacy planning, stress testing, and liquidity
management.
