PRMIA/ISDA Operational Risk in E Trading London Wednesday 10th April 2002 G D Woods Managing Director
10/4/02 G D Woods Property of ABN AMRO Bank N.V.2 E Risks Aren’t really new Market & Credit Risk work differently in an e-environment Operational Risk more discussed
10/4/02 G D Woods Property of ABN AMRO Bank N.V.3 Seven Types of Risk Inside the Organisation - People - Processes - Technology - Strategy Outside the Organisation - Business Environment - Legal Systems - Bad Guys (Attribution - Dr Nigel Upton, LBS)
10/4/02 G D Woods Property of ABN AMRO Bank N.V.4 Risks that Change FX Risk IR Risk Liquidity Risk Reputation Risk Customer Acquisition Risk Speed
10/4/02 G D Woods Property of ABN AMRO Bank N.V.5 A Checklist of e-Business Risk Issues Risk SourceCheck Risk Issues (Attribution - Dr Nigel Upton, LBS)
10/4/02 G D Woods Property of ABN AMRO Bank N.V.6 What we’re trying to achieve Lower error rates Lower costs Acceptable Risk/return
10/4/02 G D Woods Property of ABN AMRO Bank N.V.7 And the Potholes... Mistakes are more costly Higher 3rd party risks Risk clustering Resource availability Product scalability
10/4/02 G D Woods Property of ABN AMRO Bank N.V.8 Management Must understand Risks & effect on Business process Decide on Risks Accept Risks Instil culture of Risk awareness