Don’t hesitate to reach out to Aevitium LTD and we will help you to structure an ORM framework that works for your organisation. Complex, with stringent regulatory oversight. Comprehensive frameworks integrated across the enterprise. Simpler frameworks tailored to immediate needs.

FAIR Model (Factor Analysis of Information Risk)

It is primarily used in the banking and financial services industry. An ORMF streamlines processes, eliminates redundancies, and optimises resource allocation, ultimately leading to significant cost savings. A successful ORMF helps reduce the occurrence and severity of these disruptions, ensuring smoother operations and better outcomes. Operational disruptions, such as supply chain delays or IT outages, can significantly impact productivity, profitability, and customer satisfaction.

Centralized risk profiles for every vendor

• It involves the systematic process of understanding, managing, and monitoring risks to minimize the potential negative impact on an organization’s objectives and outcomes.
• Above all, it can help an organization respond resiliently to any unavoidable disruptions that might affect its operations.
• Operational risk management (ORM) is a process focused on identifying, assessing, prioritizing, and mitigating risks that arise from an organization’s day-to-day operations and business workflows.
• Remember that punishing good-faith risk reporting destroys psychological safety faster than any training program can build it.
• GRC, on the other hand, serves as the overarching framework that integrates governance policies, risk management processes, and compliance requirements into a unified system.
• Effective risk assessment prioritizes your highest-impact exposures through systematic evaluation.
• Technology platforms like Auditive automate risk detection, centralize vendor data, provide real-time monitoring, and use AI for intelligent verification.

When used for purposes such as customer due diligence and anti-money laundering, the effectiveness of an operational risk management program is something that an organization can measure. Often, the operational risks due to an organization’s people are unintentional ones. Operational risk management (ORM) is a process focused on identifying, assessing, prioritizing, and mitigating risks that arise from an organization’s day-to-day operations and business workflows. Operational risk management can provide improved risk control and position organizations to perform better mitigation when a risk becomes unavoidable. Explore the top five operational risks in banking and financial services institutions, emerging…

• Then, an ORMF is more than a tool for mitigating risks—it’s a driver of profitability and innovation.
• For example, a partner resigning with institutional client knowledge represents inherent risk; succession planning and relationship diversification reduce residual risk to manageable levels.
• This shows a stark contrast that validates the business case for risk-aware culture and accountability.
• These challenges include complexity (the size of a business and the number of processes), risk data quality, resistance to change, and the cost of implementing a thorough ORM program.
• By aligning risk management with strategic goals, an ORMF ensures that decisions are informed by a clear understanding of potential risks.
• It is calculated by multiplying the probability of risk occurrence by the potential impact of the risk.

What tools or technologies support ORM frameworks?

This integration can also help ensure that risk management is aligned with the organization’s overall strategy, and that compliance requirements are met while minimizing business disruption. Risk reporting helps organizations understand the status of their risk management efforts and take appropriate actions to address risks. To identify risks, organizations may use a variety of methods such as brainstorming sessions, interviews with stakeholders, and risk assessments.

Q1. What is the main goal of operational risk management?

In his book A Short Guide to Operational Risk, Protecht’s Chief Research & Content Officer David Tattam defines ORM as “the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events”. Operational resilience is about ensuring that critical functions continue with minimal disruption, protecting both internal operations and external stakeholders, such as customers and partners. ORM not only protects the business but also builds resilience, trust, and long-term value. Operational risk focuses on failures in day-to-day business functions, like process breakdowns, cyber incidents, or human error.
By bringing these capabilities together, Auditive transforms operational risk management from a reactive checklist into a proactive, intelligence-driven discipline. These incidents don’t just cause immediate losses, they often expose gaps in planning and controls that could have been prevented with stronger operational risk management. The first step is recognizing where operational risks exist within your organization. Comprehensive identification reveals where control gaps exist, how processes break down under pressure, and which risks could significantly impact your firm’s operations and reputation. A thorough, well-conceived operational risk management process is crucial for any organization. Leveraging technology can help organizations establish an effective framework for identifying and assessing operational risk.

For example, professional services firms must address the AICPA’s SQMS No. 1, which represents a fundamental move from rules-based to risk-based quality management approaches with a compliance deadline of December 15, 2025. Integrate risk into performance management by rewarding proactive identification, recognizing contributions to risk culture, and balancing outcome measures with leading indicators. This shows a stark contrast that validates the business case for risk-aware culture and accountability. According to BCG’s global research on risk management maturity, 71% of companies with mature risk management capabilities successfully mitigated crises, compared to just 37% with less robust practices. The key is establishing automated data collection that feeds dynamic KRI dashboards, developing tailored reporting for different stakeholders, and implementing review cycles that match your risk volatility. Controls must integrate into daily operations rather than existing as compliance theater that practitioners view as busywork.

How To Build An Operational Risk Management Framework

The organization also can develop processes and strategies to improve the odds that the risk-taking will be rewarded. Under this category fall the types of risks that businesses want to take because they are likely to lead to successful results. If these devices aren’t sufficiently secure, it could result in the loss of valuable information–or could allow cybercrooks to access the organization’s data. With Madjoker Casino the ongoing and accelerating proliferation of new technologies, new regulations, new opportunities, and new dangers, the need for managing operational risk is as great as it has ever been.
Again, ORM starts with developing a thorough framework and identifying the risks that could disrupt an organization’s effective functioning. These challenges include complexity (the size of a business and the number of processes), risk data quality, resistance to change, and the cost of implementing a thorough ORM program. These various business operations should collaborate on risk management strategies.