Operational loss event

Roles that need it

• Operational Risk Analyst
• Internal Auditor
• Compliance Officer
• Insurance Operations Specialist (Policy Administration)

Skills it belongs to

• Internal controls and risk oversight
• Data entry and record keeping accuracy
• Investigative reasoning on anomalies

Related concepts

• Operational riskOperational risk is the risk of loss from inadequate or failed internal processes, people and systems, or from external events. It includes legal risk and excludes strategic and reputational risk. Examples are fraud, processing errors, cyber incidents and outages.
• RCSA (risk and control self-assessment)A risk and control self-assessment is the periodic exercise in which a business unit identifies its operational risks, rates inherent risk, assesses how well its controls work and derives the residual risk. Results are challenged by the second line and lead to actions where residual risk exceeds appetite.
• Key risk indicator (KRI)A key risk indicator is a metric that signals rising exposure to a risk before losses occur, such as failed trades, system downtime or staff turnover. Each KRI has thresholds (often green, amber and red) linked to escalation and to the risk appetite.
• Scenario analysis (operational risk)Scenario analysis asks experts to describe severe but plausible events, such as a major cyber attack or a rogue employee, and estimate their frequency and loss. It complements internal loss data for rare, large risks and feeds capital planning and resilience work.
• Operational risk capital (business indicator approach)Under CRR3, banks calculate operational risk capital with a single standardised method based on the business indicator, a measure of income and size, replacing earlier approaches including internal models. The EU sets the internal loss multiplier to one.

Sources

• Basel Framework OPE25 Standardised approach (loss data), BIS (external site) accessed 31 Oct 2026
• Revisions to the principles for the sound management of operational risk, BIS (external site) accessed 31 Oct 2026

Updated 31 Oct 2026.