The 7 types of operational risk

2 min read
November 23, 2022
The 7 types of operational risk


Classifying risks according to the category to which they belong makes it easier to identify them. Here are the 7 types of operational risk that exist so that you can recognize them within your company.

1. Internal fraud

Theft, bribery or non-compliance with regulations by direct employees or third parties contractually linked to the company are operational risks caused by internal fraud.

2. External fraud

This type of operational risk is caused by the actions of persons external to the entity. They may occur through theft, forgery or computer attacks.

3. Technological failures

If your company is exposed to failures in computer systems, hardware or software, you must identify the operational risks generated by these events.

4. Process execution and management

Errors in process management also imply a risk for the company. In this sense, transaction capture, monitoring, reporting and customer documentation, as well as account management must be evaluated to recognize possible operational risks.

5. Labor Relations and Workplace Safety

Any actions that violate labor laws and workplace safety can create a latent operational risk. Therefore, pay attention to possible claims for personal injury or cases of employment discrimination within the company.

6. Damage to tangible assets

Fortuitous circumstances such as fires, earthquakes, terrorist acts, among others, can put your company's physical assets at risk, so it is important that you identify the damages that these events may cause.

Money Laundering and Terrorism Financing Prevention Manual

7. Customers, products and business practices

Finally, this last type of operational risk refers to acts such as unfair competition, harm to customers and misleading information about products, which may involve a risk of unintentional and negligent non-compliance.

Although there may be more of them, these 7 categories will help you to obtain an effective management of operational risks, in addition, doing it with a technological solution such as Pirani will allow you to identify, measure, control and monitor them more easily to prevent their materialization or mitigate their impact in case they occur. 

Create free account

In conclusion, the types of operational risks can occur depending on many elements of your business and are different depending on the activities you perform. However, it is essential that potential risks are identified and their impact assessed.

Did you find this content on types of operational risks useful? Leave us your comments.

Comments (1)