What is Operational Risk Management and how can Fintalent Help you hire the Best Operational Risk Management Consultants?
Operational Risk Management is a process, system, or practice employed by an organization to assess potential risks and to take measures to minimize them. It is an essential part of the risk management process at all sizes of organizations ranging from small enterprises with few employees to large corporations with many subsidiaries worldwide. It is the process of analyzing potential business issues that can impact your organization’s ability to generate profits, meet its objectives, or maintain compliance. It involves identifying operational risks early in the process and taking steps to mitigate, control, or transfer them before they become disasters.
Without a capable operational risk management system, a firm is left exposed to the everyday vagaries of running a business. Fintalent, the hiring and collaboration platform for tier-1 Strategy and M&A professionals is the go-to platform for business owners seeking experienced freelance operational risk management consultants. Fintalent’s invite only platform ensures only the best and most qualified operational risk management consultants are available for hire thereby guaranteeing value for money for hiring managers that patronize the platform.
Why is operational risk management important for business?
You may not think about it this way, but your ability to meet your financial objectives largely depends on avoiding certain types of problems that can cause significant losses. For example: An unexpected loss of a major customer could force you into bankruptcy. A data breach could lead to costly lawsuits. And an employee who behaves dishonestly could cost you millions of dollars.
Ways to avoid Operational Risks
- Hiring the right people and giving them the training they need.
- Building effective internal controls.
- Adopting best practices.
- Creating a culture that promotes operational excellence throughout your organization. Your culture must focus on taking action to identify and mitigate business risks before they become problems. It should also encourage people to take ownership, communicate openly about problems, and engage in continuous improvement activities on an ongoing basis.
How to create a culture that values operational excellence
Operational excellence is a business value that all organizations should embrace. It’s not easy to achieve, but it’s an important part of staying competitive and profitable in today’s business environment. Operational risk management is part of the process. It involves identifying problems early on and taking steps to minimize them before they cause serious harm to your organization. Just as important, operational risk management requires the creation of an efficient system for gathering and analyzing data about operational activities so you can identify problems as early as possible and take the appropriate corrective action when they occur.
Put a value on your process. Create a culture in which employees feel they have a stake in the success of the organization, and in which they understand how their daily activities contribute to the organization’s overall mission. To do this, managers must provide employees with clear direction and communicate it in an empowering manner. Identify specific ways that members of your organization can contribute to your business objectives , and then build them into the training programs for new hires.
Encourage collaboration across multiple departments. One of the most effective ways to respond to operational risks is with effective teamwork among different parts of the organization. By encouraging the sharing of information with other teams, you increase your chances of success.
Share information about mistakes . People are more likely to learn from their mistakes if they are openly discussed. While company secrets must be kept, sharing stories about problems can help your employees understand how actions can cause negative consequences.
Recognize successful efforts . Employees who take steps to address operational risks receive recognition for their efforts. They recognize that they are receiving positive reinforcement for their efforts and that others notice that they continue to make progress on difficult business issues. When employees feel that they are being recognized for their contributions, it encourages them to go above and beyond to meet expectations on an ongoing basis.
Take corrective action when problems occur. Employees who understand the importance of risk management show their commitment by taking corrective action when problems do occur, even if no one is watching.
Educate your employees about how to avoid fraud . Fraud is a serious problem for many organizations. It’s important to encourage employees to take an active role in fraud prevention by providing them with information about the most common ways that fraud occurs within your industry. For example, many companies provide ongoing training about how to recognize phishing (fraudulent e-mails) and other forms of cybercrime.
Enforce compliance with policies and procedures . When employees know that they will lose their jobs if they engage in illegal activities, they are less likely to commit fraud.
Anti-fraud and anti-money laundering (AML) education is vital to your fight against fraud and corruption. While important for all businesses, such education is essential in industries such as casinos, financial institutions, and online gaming, which are currently at high risk for corruption.
Conduct regular internal audits . Internal audits allow you to assess the effectiveness of your operational risk management strategies on a regular basis. They also give you an opportunity to share information with senior management about challenges within your organization and come up with solutions to overcome them. Examples of internal audit reports include: Control self-assessments.
Why you need Fintalent’s Operational Risk Management Consultants
Due to the widespread use of technology, operational risk has grown substantially in recent years. Banks and other financial institutions have been forced to develop proper models and systems for measurement and reporting as part of their regulatory requirements (Basel II). Operational risk is also a concern for the insurance industry as well as for other large companies such as those in manufacturing, retail, logistics, and local government. Operational risk management consultants are often employed to ensure compliance with operational risk management standards such as ISO 31000.
For firms that may nor be able to hire a full time in-house Operational Risk Management expert, Fintalent offers the best of both worlds by presenting a platform to enable hiring managers hire experienced Operational Risk Management Consultants on an ad hoc basis with its rich pool of Freelance operational risk management consultants.