Managing Operational Risk​

One of the most substantial risks that participants in the investment lifecycle can face – including issuers, advisors, administrators, and investors – is operational risk. 

Our Operational Risk Advisor, Ellen Davis,  talks about how to reduce operational risk by improving collaboration, accountability, and transparency and how organisations can enhance data governance, document security and compliance. 

Managing Operational Risk

Introduction

One of the most substantial risks that participants in the investment lifecycle can face – including issuers, advisors, administrators, and investors – is operational risk. ​​

The classic definition of operational risk was written by the Basel Committee on Banking Supervision, an international committee of senior banking regulators. It says operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk.​​

This definition should raise red flags. Within the investment lifecycle, a wide range of essential inputs need to be processed by individuals each day – and getting this right is the basis of strategic success. For example, the due diligence process has complex and confidential interdependencies, with mistakes costing time and money. Making informed decisions usually involves receiving materials from many different subject matter experts (SMEs) within a specific time frame. Failing to coordinate this assessment process – so that the correct SMEs are contacted, their analyses are received, and follow-up questions are addressed – can lead to poor decision-making and lost opportunities. This is a classic case of operational risk in action – with potential people and process breakdowns – and their consequences. ​​

This white paper will explore five key sources of operational risk for the key participants in the investment lifecycle – issuers, advisors, administrators, and investors. It will also discuss how the Phundex technology platform can help reduce operational risk through enhancing collaboration, accountability, and transparency. 

​To see the rest of the paper, please download our free e-book on the link below

Want to know more? Check out our resources page at https://phundex.com/resources/  on LinkedIn at   https://www.linkedin.com/company/67946857/     or drop us an email at: hello@phundex.com. 

To book a demo – you can either use the link on our website or email support@phundex.com and they will be happy to set it up for you.