Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events. It encompasses a wide range of potential threats, including human errors, system failures, technology glitches, fraud, legal issues, regulatory non-compliance, and even natural disasters. Operational risk can significantly impact an organization's financial health, reputation, and overall stability. Effective management of operational risk involves implementing robust internal controls, risk assessment procedures, and contingency plans to minimize the likelihood and impact of operational failures.