Operational Risk

Operational risk is the risk that causes direct or indirect loss that an organisation face which is caused as a result of failure or inadequate internal processes, people, system and external event.
Different sectors face different types of risk, let's look at some of the types of operational risk

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Regulatory compliance

This is the risk that occurs as a result of the staff of the organisation not following all the laid down rules and regulations which can lead to serious financial loss.

People

The fact that you employ people to work in your organisation open you up to the different risk that comes from human activities.

Third party (vendor)

Most of the big companies have vendors that work for them. This vendor can compromise the security of the organisation.

System risk

System risks are also an example of operational risk that an organisation can face, for example, their system use for the business can break down or develop faults which can affect productivity.

Product risk

The product that company product can also face different risks for example accidents, damage, stealing and many more. In any of these scenarios, the organisation loses a lot of money and profit.

Cyber and information security

This is another risk that companies face as they run their day-to-day activities.

Fraud risk

Fraud risk is a risk that arises when an insider or external person or collision between the insider and external person commits fraudulent activities that affect the organisation.

In conclusion, it is very important for every organisation and company's management should put in place different measures, policies and procedures are put in place.