What is the primary objective of operational risk management?

The primary objective of operational risk management is to identify, assess, control, and monitor the risks associated with the day-to-day operations of an organization. This includes identifying potential losses that could occur as a result of inadequate or failed internal processes, people, systems, or external events. By effectively managing operational risks, organizations can minimize disruptions to their business operations, prevent financial losses, protect their reputation, and ensure compliance with regulatory requirements.

Operational risk management focuses on implementing proactive measures to prevent and mitigate risks, as well as developing strategies to respond to and recover from any incidents that do occur. This may involve implementing internal controls, establishing risk mitigation procedures, conducting regular risk assessments, and ensuring that staff members are trained to effectively manage operational risks.

Overall, the primary objective of operational risk management is to enhance the overall resilience and sustainability of an organization by effectively managing and minimizing the potential impacts of operational risks.