White Paper

Operational Risk Modeling in Banking: Basel III Frameworks, Approaches, and Techniques

Overview

This white paper offers guidance for banking executives, risk managers, and compliance professionals on enhancing operational risk management practices in accordance with Basel III mandates. It explores operational risk modeling in line with the Basel III regulatory framework, highlights key approaches and advanced techniques. The paper also discusses challenges and opportunities in operational risk modeling, emphasizing the need for data-driven approaches and compliance with regulatory changes.

Takeaways

  • Guidance for improving operational risk management practices in line with Basel III mandates.
  • Explanation of key approaches to managing operational risks: BIA, SA, AMA, and SMA.
  • Emphasis on transitioning from qualitative to quantitative, data-driven approaches.
  • Recognition of challenges and opportunities from regulatory changes, data management, and new technologies, including cybersecurity and ESG factors.