Operational Loss Events
Number and value of operational risk incidents in a period
What is Operational Loss Events?
Operational loss events is the count and total value of all recorded losses from operational failures in a period, such as errors, system failures, fraud or process breakdowns. It shows how much operational risk is turning into real losses.
For financial firms, tracking these events supports capital planning and helps focus fixes on the biggest causes.
How this KPI is measured
- Function
- Legal, Risk & Compliance
- Sub-function
- Operational Risk
- Industry
- Financial Services
- Type
- Lagging
- Impact
- Risk
- Unit
- #
- Measurement frequency
- Monthly / Quarterly
- Formula
- Count and sum value of all recorded operational loss events in period
How to calculate it
Count the operational loss events recorded in the period and add up their values.
For example, if a firm recorded 42 loss events with a combined value of 3,200,000, the figures are 42 events and 3,200,000.
Classify events by type and business line using a standard categorisation, encourage complete reporting, and include near misses where they are useful for learning.
Where it is used
Managing operational risk
See what goes wrong.
Guiding control investment
Fix the biggest causes.
Supporting capital and reporting
Provide data for regulators.
How to improve it
Tips and common mistakes
- Under-reporting hides risk. Encourage openness.
- Look at both count and value.
- Include near misses for learning.
More Legal, Risk & Compliance kpi library
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