Electronic versions

Documents

  • Modernising operational risk management

    Accepted author manuscript, 449 KB, PDF document

    Embargo ends: 2/12/24

    Licence: CC BY-NC-ND Show licence

DOI

To enable more proactive management of the underlying sources of operational risks in financial institutions, this pre-registered study seeks to improve traditional qualitative approaches to causal factors analysis. A Bayesian network-based approach is used to leverage both incident and operations data to model the probability of operational loss events. The approach is applied and empirically tested in a case study on an Australian insurance company. The outputs from the model go beyond simply identifying key risk drivers to offer risk managers a deeper understanding of how causal factors influence risk. Insights into the collective effects of causal factors, their relative importance and critical thresholds strategically inform more efficient and effective mitigation decisions, ultimately enhancing firm performance and value.
Original languageEnglish
Article number101906
JournalPacific-Basin Finance Journal
Volume77
Early online date2 Dec 2022
DOIs
Publication statusPublished - Feb 2023
View graph of relations