• International Journal of Quality Innovation
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• v.10 no.2
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• pp.1-17
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• 2009

This paper presents a theoretical research framework that was used to analyse operational risk management (ORM) system practices in Australia. It provides a new perspective on how to use national and international operational management system standards as a basis for systematic management of operational risks. Based on the extensive literature review and the analysis of operational risk management system practices that are common in Australian organisations, this paper identifies the critical factors for effective use of an ORM system. The proposed framework could also be used as a model to research ORM system applications in other countries.

• Asia pacific journal of information systems
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• v.25 no.3
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• pp.597-625
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• 2015

Prior research has emphasized the significant effect of service orientation on organizational performance. However, little research on service orientation has been conducted in the financial field, including the investment management service industry in which high quality service for clients is required. In this paper, we propose a research model that centers on the concept of service orientation as a type of dynamic capability affecting firm performance. The research variables include job competency, risk management capability, operational capability, service orientation, and service performance. We assume that service orientation partially mediates the effects of risk management capability and operational capability on service performance. To test the model, we collected data from 391 fund managers in 86 teams (37 investment management companies) and analyzed it with partial least squares (PLS) method. Each of the 391 fund managers was asked to answer team level measures, which is effective for team level analysis. We find that job competency positively affects both risk management capability and operational capability, which in turn affect service orientation. Risk management capability and operational capability are assumed to directly affect service performance. However, risk management capability does not influence perceived service performance, whereas operational capability does affect it. This result indicates that risk management capability does not directly affect service performance. However, via service orientation, considering that risk management inconveniences customers and is geared to enhance service orientation, service performance is positively affected. Operational capability does not influence service orientation, whereas it affects perceived service performance. This result reveals that operational capability directly affects firm performance. As expected, service orientation significantly affects the service performance perception of fund managers. This study contributes to the literature by introducing service orientation to the financial industry and measures and tests team-level service performance. Our findings also provide insights to practitioners because to enhance team performance, managers must focus on service orientation in addition to operational capability.

• Korean Management Science Review
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• v.28 no.3
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• pp.73-82
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• 2011

Basel II advanced measurement approaches for operational risk need to estimate the frequency and severity distribution of operational losses. Due to lack of internal loss data, the estimation is impossible in many cases and so external loss data might be used by scaling on asset or gross income. To get around lack of loss data, scenario analysis combined with loss distribution approach can be useful in calculating the capital charge of operational risk. However, scenario based loss distribution approach requires much time and effort. Instead we may apply the analytic hierarchy process to measure operational risk of financial institutions. The analytic hierarchy process combined with loss distribution approach is to estimate the capital charge of operational risk in other areas based on the operational VaR in an area with sufficient loss data. AHP provides a tool for timely measurement of operational risk in this rapidly changing global environment.

• Journal of Information Technology Applications and Management
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• v.14 no.3
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• pp.95-113
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• 2007

To minimize IT operational risks and the opportunity cost for lost business hours. it is necessary to have preparedness in advance and mitigation activities for minimization of a loss due to the business discontinuity. There are few cases that banks have a policy on systematic management, system recovery and protection activities against system failure. and most developers and system administrators response based on their experience and the instinct. This article focuses on the mitigation model development for minimizing the incidents of disk unit in IT operational risks. The model will be represented by a network model which is composed of the three items as following: (1) the risk factors(causes, attributes and indicators) of IT operational risk. (2) a periodic time interval through an analysis of historical data. (3) an index or an operational regulations related to the examination of causes of an operational risk. This article will be helpful when enterprise needs to hierarchically analyze risk factors from various fields of IT(information security, information telecommunication, web application servers and so on) and develop a mitigation model. and it will also contribute to the reduction of operational risks on information systems.

• Journal of Information Technology Services
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• v.4 no.1
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• pp.129-139
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• 2005

This paper proposes a framework of Operational Risk-based Business Continuity System(ORBCS), and develops protection system for operational risk through operational risk assessment and loss distribution approach based on risk management guideline announced in the basel II. In order to find out financial operational risk, business processes of domestic bank are assorted by seven event factors and eight business activities so that we can construct the system. After we find out KRI(Key Risk Indicator) index, tasks and risks, we calculated risk possibility and expected cost by analyzing quantitative data, questionnaire and qualitative approach for AHP model from the past events. Furthermore, we can assume unexpected cost loss by using loss distribution approach presented in the basel II. Each bank can also assume expected loss distributions of operational risk by seven event factors and eight business activities. In this research, we choose loss distribution approach so that we can calculate operational risk. In order to explain number of case happened, we choose poisson distribution, log-normal distribution for loss cost, and estimate model for Monte-Carlo simulation. Through this process which is measured by operational risk. of ABC bank, we find out that loss distribution approach explains closer unexpected cost directly compared than internal measurement approach, and makes less unexpected cost loss.

• Journal of Korea Society of Industrial Information Systems
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• v.26 no.6
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• pp.61-80
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• 2021

As the business environment becomes more rapid and unpredictable change, greater diversity, increased complexity, and intensified competitive pressures, supply chain risk management has been growing attention over the past several decades. However, little of known about how absorptive capacity can mitigate supply chain risk for improving operational performance despite its important role in responding to supply chain risk. Therefore, we aim to examine the role of organizational-level absorptive capacity on operational performance, and further identify how the interplay of individual-level and organizational-level absorptive capacity results in operational performance. Our results represent not only direct but also indirect effects of supply chain risk on operational performance, mediated by organizational-level absorptive capacity. Furthermore, this study reveals that individual-level absorptive capacity enhances the effect of organizational-level absorptive capacity on operational performance.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.9
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• pp.249-261
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• 2022

Globally, COVID-19 has significantly impacted many different organizations and people. From the banks' perspective, this pandemic has affected banks' corporate and retail customers. Also, banks had to adjust to distributed workforce model. This paper analyses the lessons learned from the COVID-19 pandemic, which can be effectively used to rebuild banks' Operational Risk Management capabilities. The present study used the survey research methodology, which includes structured questionnaires completed by senior banking professionals to analyze the learnings from COVID-19 and understand the distributed workforce model and remote working effectiveness. Findings: The Pandemic accelerated the pace of digital transformation. The lockdown imposed due to the pandemic led to employees working remotely, which has been effective because of enhanced digital capabilities. However, enhanced monitoring is required to prevent data-related issues, and action needs to be taken to address challenges faced in having a remote distributed workforce model, like negative impact on on-the-job learning, data-related risks, and employee wellbeing. COVID-19 is an unprecedented event that could not have been predicted in any scenario analysis. This crisis has highlighted various systemic drawbacks that need to be addressed. Banks can apply the lesson learned from this Pandemic to become more robust in the future.

• Journal of Convergence for Information Technology
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• v.10 no.8
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• pp.187-193
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• 2020

This study analyzed how risk factors in management affect the management of working capital in general hospitals in Korea. The data used accounting information for three years (2016~2017 and 2018) of 271 general hospitals using the medical institution accounting information disclosure system. The independent variables were the working capital level and the cash conversion cycle, The dependent variables were operational risk and market risk, Control variables were selected as components of working capital(cash, accounts receivable, inventory assets, accounts payable). According to the study, the lower the operational risk, the higher the level of working capital hospitals in Korea. Working capital decisions were confirmed to be attributable to operating risks, cash, inventory assets and accounts payable. And the lower the market risk (Operating Margin), the higher the cash conversion cycle. Therefore, it is necessary to review appropriate management measures of operational risks, cash, inventory assets and accounts payable identified as operating capital determinants so that medical institutions can also have economic response capabilities in consideration of the specificity of their operations.

• Journal of the Korea Institute of Information Security & Cryptology
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• v.24 no.4
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• pp.705-719
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• 2014

Recently the importance of operational risk is gradually increasing in risk management of financial institute. Especially the service interruption caused by system failure can lead to customer complaints, decrease of profit and customer secession. Thus, financial industry makes diverse effort to minimize the impact caused by the system failure of IT application. Common modules are used in IT system in financial industry to exclude redundant development and to use the system efficiently. However, when a failure in common module is occurred, the risk that affects all the tasks using the common module exists. In this study, the damage affected by a failure in application program is prevented separating common module which has a large risk by task in the perspective of IT operational risk. In order to cope with damage, the research on the factors related to common module is conducted and proposes the separating common module standard for decrease of operational risk of the financial IT.

• Nuclear Engineering and Technology
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• v.49 no.2
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• pp.313-326
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• 2017

The systematic management of plant risk is crucial for enhancing the safety of nuclear power plants and for designing new nuclear power plants. Accident sequence precursor (ASP) analysis may be able to provide risk significance of operational experience by using probabilistic risk assessment to evaluate an operational event quantitatively in terms of its impact on core damage. In this study, an ASP methodology for two operation mode, full power and low power/shutdown operation, has been developed and applied to significant accident precursors that may occur during the operation of nuclear power plants. Two operational events, loss of feedwater and steam generator tube rupture, are identified as ASPs. Therefore, the ASP methodology developed in this study may contribute to identifying plant risk significance as well as to enhancing the safety of nuclear power plants by applying this methodology systematically.