The Operational Risk Handbook for Financial Companies -- A Performance-oriented Approach to Operational Risk Management

  • We must push hard enough to see enough to understand potential problems and opportunities in a changing environment.
  • Risk management should improve agility, making it safer to move in a changing environment.
  • Risk management doesn't matter if people don't act differently.

-- Brian Barnier

Risks We Face, Challenges to Improvement

Risks to products and operations in financial service firms are everywhere.

The global financial crisis of 2007-2009 occurred in an environment of multiple operational problems, but even before the crisis banks were suffering a range of inefficiencies and gaps as they sought to provide services.

Meanwhile existing guidance approaches operational risk as either a set of boxes to be ticked off, or an abstruse set of calculations to be undertaken at ever greater remove from the human reality of day-to-day work in a financial services firm.

Path to Performance, Easier Progress

Stepping into this gap, and providing clear and accessible guidance for financial firms of all sizes and activities, The Operational Risk Handbook for Financial Companies is a groundbreaking new book. It seeks to apply for the first time a range of proven ops risk techniques from other industries and disciplines to the troubled territory of financial services.

Operational risk expert Brian Barnier introduces a range of sophisticated, dependable and - crucially - approachable tools for risk evaluation, risk response and risk governance. He provides a more robust (even fun) way of gaining a better picture of risks, shows how to build risk-return awareness into decision making, and how to fix (and not just report) risks.

The practical importance of fully understanding and acting on risk to the business begins in the foreword on plan-B thinking, penned by Marshall Carter, chairman of the NYSE and deputy chairman of NYSE Euronext.

For Companies of All Sizes

Suitable for companies of all sizes, this book is of direct relevance and use to all business managers, practitioners, boards and senior executives. Key insights from and for each are built into every chapter, including unique contributions from board members from a range of financial companies -- Ronald Dietz, Capital One; Mark Olson, former governor, Federal Reserve System; Karen Osar, Webster Financial; Humphrey Polanen, Heritage Commerce Corp.; and Richard Sergel, State Street.

The Operational Risk Handbook for Financial Companies is an essential book for making better decisions at every level of a financial services firm: ones that measurably improve outcomes for boards, managers, employees and shareholders alike.

The Handbook is unique because:
  • It’s not just about modeling and a few basic tools derived from regulatory requirements. Instead, it looks at management of risk to products and operations across industries, professional disciplines and history to help risk leaders become aware of the entire landscape of proven experience, not just their conference room.
  • It’s not just about compliance. Instead, it looks to operations as part of performance -- managing risk to return for shareholders and other interests (e.g., guarantee funds).
  • It’s not content to look at risk in segments or silos, instead it takes a systems approach.
  • It’s not just about ops risk leaders sharing war stories at a conference. Instead, it introduces a panel of six financial institution board members who “get” risk management and provide their perspectives throughout the book to encourage/demand more from ops risk to meet the needs of a company in a dynamic world.
  • It’s not a semi-random collection of tips and tricks. Instead, it is grounded in a risk management process flow tailored to financial companies from a range of proven experience. Then, tools to help at each step.

Good risk management is...

Building value


Always having a Plan B (and C, D and ...)


The laser eye surgery of business -- it sharpens focus.

Improving agility to more safely seize opportunity.


Managing change, complexity and fatigue.


Systems, dependencies and root causes


Cascading and unfolding situations, not "events"


Powered by the "invite" and "flashlight"


Being humble


Fighting bias to overcome blind spots


Knowing limitations


Creating options to overcome limitations


Knowing the business value of your options


Knowing now, rather than later


Having more time to act


Simple for any kid who loves role-playing computer games


More easily achieving performance objectives





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