Operational Risk Assessment Course

Lesson 1 • The Risk Management Lifecycle

Introduces the identify-assess-control-monitor cycle as the organising framework for the course. Students see how each later chapter fits within this cycle.

Lesson 2 • Defining Operational Risk

Establishes the standard definition of operational risk and its boundaries. Connects terminology to real-world loss events so students can apply consistent language.

Lesson 3 • Stakeholders and Governance Basics

Identifies who owns, manages, and oversees operational risk in an organisation. Students map roles to responsibilities before studying governance in depth.

Lesson 1 • Process Mapping for Risk Discovery

Uses process flow diagrams to expose failure points at each step. Students practise mapping a business process and annotating risk nodes.

Lesson 2 • Risk and Control Self-Assessment

Covers the design and facilitation of RCSA workshops with business units. Students learn to elicit honest risk disclosures and document findings consistently.

Lesson 3 • Scenario Analysis for Emerging Risks

Scenario analysis identifies risks not yet visible in historical data. Students construct plausible adverse scenarios tied to strategic and environmental changes.

Lesson 4 • Interviews and Expert Elicitation

Structured interviewing extracts tacit knowledge from subject-matter experts. Students apply questioning techniques that reduce anchoring and groupthink bias.

Lesson 1 • Aggregating and Prioritising Risks

Combines individual risk ratings into a portfolio view for management attention. Students apply weighting and aggregation logic to rank risks consistently.

Lesson 2 • Likelihood and Impact Scales

Defines ordinal scales for frequency and severity and anchors them to observable criteria. Students calibrate scales to their organisational context.

Lesson 3 • Control Effectiveness Evaluation

Assesses whether existing controls adequately reduce inherent risk to acceptable residual levels. Students apply a structured control rating framework.

Lesson 1 • Loss Data Collection and Cleansing

Internal loss data is the foundation of quantitative models. Students collect, categorise, and cleanse loss records to meet modelling quality standards.

Lesson 2 • Value at Risk and Expected Loss

Defines Value at Risk and Expected Loss as key risk metrics derived from loss distributions. Students calculate and communicate these metrics to non-technical audiences.

Lesson 3 • External Data and Scaling

External loss databases supplement sparse internal data for tail-risk estimation. Students apply scaling techniques to adjust external data to their organisation's size.

Lesson 4 • Monte Carlo Simulation Basics

Monte Carlo methods combine frequency and severity distributions to generate aggregate loss distributions. Students run basic simulations and interpret percentile outputs.

Lesson 1 • Accountability and Incentive Alignment

Aligns performance management and incentive structures to reinforce desired risk behaviours. Students redesign a flawed incentive scheme to reduce moral hazard.

Lesson 2 • Policies, Standards, and Procedures

Establishes the policy hierarchy that governs risk management activities across the organisation. Students draft a policy document and align it to governance requirements.

Lesson 3 • Risk Appetite and Tolerance Frameworks

Translates board-level risk appetite into operational tolerance statements and limits. Students draft appetite statements and link them to KRI thresholds and control triggers.

Lesson 4 • Governance Committee Structures

Designs committee mandates, membership, and reporting lines for operational risk oversight. Students map information flows from business lines to the board.

Lesson 1 • Control Design Principles

Applies design principles that make controls robust, auditable, and proportionate. Students critique poorly designed controls and redesign them to close gaps.

Lesson 2 • Control Testing and Validation

Validates that controls operate as designed through testing protocols. Students design test plans, execute walkthroughs, and document exceptions.

Lesson 3 • Control Typology and Selection

Classifies controls as preventive, detective, or corrective and maps each type to risk categories. Students select the most cost-effective control mix for a given risk.

Lesson 1 • KRI Reporting and Dashboard Design

Translates KRI data into management dashboards that support timely decisions. Students apply data visualisation principles to build clear, actionable risk reports.

Lesson 2 • KRI Design and Selection

Defines the properties of an effective KRI and distinguishes leading from lagging indicators. Students select KRIs that are predictive, measurable, and actionable.

Lesson 3 • Escalation and Response Protocols

Defines what happens when a KRI breaches a threshold, including escalation paths and response actions. Students draft an escalation matrix tied to risk severity.

Lesson 4 • Threshold Setting and Calibration

Establishes green, amber, and red thresholds using statistical and judgment-based methods. Students calibrate thresholds to avoid false positives and missed signals.

Lesson 1 • Capstone: Integrated Risk Assessment Project

Students apply all course techniques to a realistic organisational case, producing a full risk assessment deliverable. Peer review and instructor feedback close the learning loop.

Lesson 2 • Continuous Improvement of the Risk Programme

Applies maturity models and benchmarking to identify programme improvement opportunities. Students conduct a maturity assessment and build a roadmap for advancement.

Lesson 3 • Enterprise-Wide Risk Integration

Connects operational risk assessment to enterprise risk management and strategic planning. Students map operational risks to strategic objectives and board-level priorities.