Operational Resilience: Reserve Bank of India's Guidance Note on ORM and OR Series
OR BB RBI Guidance Notes Sec 8-3

[OR] [RBI] [8] Monitoring and Reporting

Effective risk management is essential for safeguarding an organization’s operational resilience, beginning with robust monitoring and reporting practices. The Reserve Bank of India’s Guidance Note highlights the importance of continuous oversight in managing operational risks. Principle 8, "Regular Monitoring and Reporting of Operational Risk," emphasizes how timely identification and communication of risk factors are critical in ensuring financial institutions remain agile and prepared for disruptions. This principle is designed to equip organizations with the tools to assess real-time risks and adapt to changing environments.

In today’s dynamic financial landscape, where risks can emerge from various sources—cyber threats, system failures, or third-party dependencies—the need for ongoing risk evaluation is more pressing than ever. Principle 8 underscores the value of regular, transparent reporting mechanisms that engage the Board and Senior Management, ensuring that key stakeholders have visibility into risk trends and can make informed decisions. By implementing comprehensive monitoring and reporting frameworks, institutions enhance their resilience and foster a culture of proactive risk management.

Explore how this principle can help strengthen your organization’s operational defences.

Moh Heng Goh
Operational Resilience Certified Planner-Specialist-Expert

Risk Management Environment: Monitoring and Reporting

In risk management, monitoring and reporting are crucial elements that ensure the effectiveness of an organization's risk management strategies. This process involves continuously observing identified risks and assessing how these risks evolve and impact business operations. Accurate and regular reporting enables management to make more informed and responsive decisions, taking proactive measures to mitigate potential negative impacts. It also ensures that existing risk controls remain relevant and sufficient to protect the organization from possible threats.

Principle 8: Regular Monitoring and Reporting of Operational Risk

Senior Management must establish a process for regularly monitoring Operational Risk profiles and significant operational exposures. Effective reporting mechanisms at all organizational levels, including the Board of Directors, Senior Management, and business units, are essential to support proactive management of Operational Risk.


Critical Components of Monitoring and Reporting
Comprehensive Reporting


Reports should be accurate, consistent, and actionable across business units and products.
The first line of defence must report on residual Operational Risks, including risk events, control deficiencies, process inadequacies, and non-compliance with risk tolerances.
Reports should be manageable in scope and volume, providing a clear outlook on the risk profile and adherence to the Operational Risk appetite and tolerance statement.

Timely Reporting
  • Reporting must be timely and capable of producing reports under expected and stressed market conditions.
  • The reporting frequency should reflect the level of risk and the pace of changes in the operating environment.
  • Monitoring results should be included in regular management and Board reports, alongside assessments from internal/external audits and risk management functions.
  • Reports for supervisory authorities should also be shared internally with Senior Management and the Board.
Detailed Risk Profile Descriptions

Operational Risk reports should detail the risk profile using internal financial, operational, and compliance indicators and relevant external market or environmental information.
Periodic Analysis of Reporting Processes

Data capture and risk reporting processes should be periodically analyzed to enhance performance and improve risk management policies, procedures, and practices.

Operational Resilience Reporting

Senior Management must provide timely reports to the Board on the operational resilience of business units, particularly when significant deficiencies could affect the delivery of critical operations.


By implementing these practices, organizations can ensure robust monitoring and reporting of Operational Risks, enabling proactive management and support for operational resilience.

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