Operation Management Model

1289 Words6 Pages

Recently operation management and operating activities have been developed significantly in the finance industry. Financial technologies, different kind of banking services and IT have played a very crucial role to use operation management widely. To addition this in 2006, Basel II framework was introduced in order to allocate enough capital to hedge operational risk. Operational risks are not a common issue in the finance industry but also we can face supply chain and other industries.
This research report draws on operational risks management process reference model and other factors of operational risks such as IT, operating system and cyber-attack in the first chapter. It will describe finance industry operational risks and also supply …show more content…

Methodology and research structure
The author would like to use some global supply chain risk mitigation and risk drivers' frameworks in supply chain management, tables from The Convergence of Operational Risk and Cyber Security report by Accenture, charts from Basel committee and use two cases: Mizuho bank and Daiwa Bank to understand operational risk management in financial institutions. To make mitigation strategies, this research analyzes operational risk management cases in two big Japanese banks. Therefore, this research will focus on analyzing important part of operational risk management and how it affect to companies productivity and reputations.
This research includes five chapters: Chapter 1: Introduction of research report and Chapter 2: History of Operation risk management in financial institutions, Chapter 3: Case study of Mizuho Bank and Daiwa Bank operational risk discussed risk factors, Chapter 4: What we learned from the past and how can we improve operation risk management in financial institutions and finally chapter 5: conclusion.
1.3. What is the operational risk?
In general terms; the operational risk is defined as all the risks which are excluded from the credit and market risk. The Basel Committee defines operational risk …show more content…

S. (2006).
In this chart, it can be seen that banks most probably face these risk when they are operating their business. In the past, the credit risk and market risk were considered a common risks, mainly in the financial institutions.
People risk. It is a possibility of loss exposure which will be determined to fail running internal controls, employee’s behavior, culture of HR, and structure of an organization (Jobst, 2007; McConnell, 2008). This risk happens daily basis, even hourly, continuously because the company may lack of training for its employees. When employees are tired, change of personal circumstances, concentration level's up and down, how experienced and skilled workers, and behavior of person will result in change continuation at business operations (Breden, 2008). Many cases we can see that, company employers try to develop and instruct employees for different unexpected situations and they are willing to look for particular talents and individualities in their employment staff to fit inside the corporate value and principles. At the process of business operations turn to the wrong direction, faults grow, and company may put its reputation in a risk, company managers cannot control or manage properly their employees. Sometimes, even good employee of company can do something unexpected bad for management because of their situation which will place them in severe conditions. If controls are weak, managers neglect some situations and that

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