Recruiter's Glossary

Examples: Risk Assessment • Inherent Risk • SOX Compliance

Operational Risk

Term from Risk Management industry explained for recruiters

Operational Risk is about identifying and managing potential problems that could affect a company's day-to-day operations. Think of it as watching out for things that could go wrong in how a business runs - like computer system failures, employee mistakes, or process breakdowns. It's different from financial risk (which deals with money and investments) because it focuses on the practical running of the business. People who work in Operational Risk help companies prevent costly mistakes and ensure everything runs smoothly. This has become especially important since major banking regulations like Basel II and III made it a required focus for financial institutions.

Examples in Resumes

Developed and implemented Operational Risk frameworks for a global banking organization

Led Operational Risk assessments across multiple business units

Created reports and dashboards to track Operational Risk metrics

Managed OpRisk control testing and validation processes

Conducted Operational Risk Management training for staff across departments

Typical job title: "Operational Risk Managers"

Also try searching for:

Operational Risk Analyst Risk Management Specialist OpRisk Manager Risk Control Officer Operations Risk Specialist Risk and Control Manager Enterprise Risk Manager

Where to Find Operational Risk Managers

Professional Associations

Online Communities

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you develop an operational risk framework for a large organization?

Expected Answer: A senior candidate should explain the process of creating a comprehensive risk assessment system, including identifying key risks, setting up monitoring processes, creating policies, and getting buy-in from different departments. They should mention experience with implementing such frameworks.

Q: How do you handle conflicts between business growth goals and risk management requirements?

Expected Answer: Look for answers that show experience in balancing business needs with risk control, ability to communicate with different stakeholders, and finding practical solutions that protect the organization while allowing for business development.

Mid Level Questions

Q: What methods do you use to identify and assess operational risks?

Expected Answer: Candidate should describe risk assessment tools, such as risk matrices, incident reporting systems, and control testing. They should explain how they gather information from different departments and analyze potential risks.

Q: How do you create effective risk reports for different audiences?

Expected Answer: Look for understanding of how to present risk information differently to various stakeholders - detailed technical reports for risk committees, simplified overviews for senior management, and practical guidance for operational staff.

Junior Level Questions

Q: What is the difference between operational risk and other types of risk?

Expected Answer: Candidate should explain that operational risk deals with problems in processes, systems, and people, while other risks like market risk or credit risk deal with financial losses from investments or lending.

Q: How would you document and report a risk incident?

Expected Answer: Look for understanding of basic incident reporting processes, including gathering relevant information, categorizing the incident, documenting impact and response, and knowing who to notify.