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CLIENT CASE STUDY


Early mover—large European bank embeds Operational Risk Appetite Framework in decision-making

Aligning operational risk management practices to meet regulatory requirements

Overview

Accenture has helped this large European bank define its Operational Risk Appetite Framework (OpRAF), aligning it to its business strategy. The framework is actionable, supporting decision-making and accountable business practices, and helping to minimize the cost of risk in compliance with client identified requirements.

DOWNLOAD: LARGE EUROPEAN BANK: EMBEDDING OPERATIONAL RISK APPETITE FRAMEWORK IN DECISION-MAKING [PDF]

Client Profile: The client is a large commercial European bank with more than 100,000 employees.

Managing operational risk—Proactively

The client wanted to proactively manage its operational risk (OpRisk) to reduce operational losses and capital allocation, and improve its bottom line. It identified the need to:

  • Develop actionable and forward-looking operational risk appetite metrics.

  • Link its Operational Risk Appetite Framework (OpRAF) with its business objectives.

  • Perform a forward-looking evaluation of operational risks related to sensitive transactions.

Based on Accenture’s experience with operational risk management, its strong relationship with this client and its extensive knowledge of the client’s business, the bank asked Accenture to support it in achieving these goals.

A framework to steer the business

Accenture proposed the definition of an OpRAF for the bank, including definition of a governance model and methodology, followed by a pilot implementation. This would assist in the creation of an actionable risk management tool to help steer business decisions, help identify risk promptly, and help provide appropriate actions and processes to mitigate risk and/or escalate issues. Definition of an operational risk assessment process for potentially sensitive transactions, such as outsourcing transactions and new business initiation, was also proposed.

Accenture’s innovative OpRAF approach employed forward-looking metrics linked to the bank’s business strategies to support accountable business practices. It will assist the bank to timeously address process and behavior issues that may potentially disrupt budget achievements, and help it to achieve its desired risk/return profile.

“Accenture’s innovative OpRAF approach employed forward-looking metrics linked to the bank’s business strategies…”

Sound OpRisk governance

This project has helped the client define an OpRAF for the bank that is aligned with its stated business strategy and embedded within key decision-making processes. It puts in place the foundation to help drive sound and effective governance of the bank’s operational risk profile, in line with stated regulatory principles and international preferred practices.

The OpRAF will assist the bank to:

  • Reduce operational losses

  • Reduce its risk-weighted assets (RWA)

  • Effectively manage operational risks

  • Monitor its operational risk/return profile

This project positions the client as an early mover in terms of addressing OpRisk management practices at this level to align them with stated regulatory requirements.


DOWNLOAD: LARGE EUROPEAN BANK: EMBEDDING OPERATIONAL RISK APPETITE FRAMEWORK IN DECISION-MAKING [PDF]