What does operational risk mean?
Definitions for operational risk
op·er·a·tional risk
This dictionary definitions page includes all the possible meanings, example usage and translations of the word operational risk.
Wikidata
Operational risk
Operational risk is "the risk of a change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events, differ from the expected losses". This definition from the Basel II regulations was also adopted by the European union Solvency II Directive.". It can also include other classes of risk, such as fraud, security, privacy protection, legal risks, physical or environmental risks. Operational risk is a broad discipline, close to good management and quality management. In similar fashion, operational risks affect client satisfaction, reputation and shareholder value, all while increasing business volatility. Contrary to other risks operational risks are usually not willingly incurred nor are they revenue driven. Moreover, they are not diversifiable and cannot be laid off, meaning that, as long as people, systems and processes remain imperfect, operational risk cannot be fully eliminated. Operational risk is, nonetheless, manageable as to keep losses within some level of risk tolerance, determined by balancing the costs of improvement against the expected benefits.
Numerology
Chaldean Numerology
The numerical value of operational risk in Chaldean Numerology is: 7
Pythagorean Numerology
The numerical value of operational risk in Pythagorean Numerology is: 3
Examples of operational risk in a Sentence
It cannot be excluded that in order to minimise the operational risk we will reduce the scale of orders from JSW.
The code’s arbitration model with bias criteria presents unmanageable financial and operational risk for Google, if this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia.
That has to be weighed against potential operational risk.
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"operational risk." Definitions.net. STANDS4 LLC, 2024. Web. 26 Apr. 2024. <https://www.definitions.net/definition/operational+risk>.
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