Modernising operational risk management in financial institutions via data-driven causal factors analysis: A pre-registered report
Research output: Contribution to journal › Article › peer-review
Electronic versions
Documents
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 language | English |
---|---|
Article number | 101906 |
Journal | Pacific-Basin Finance Journal |
Volume | 77 |
Early online date | 2 Dec 2022 |
DOIs | |
Publication status | Published - Feb 2023 |