For this assignment, you will write a minimum three-page paper (not including APA title or references pages). In this paper, please address the following questions:
- What are the operational risk exposures that banks encounter?
- What are specific system and technology risks that banks face?
- What are specific people risks that banks encounter?
- What methods can be used to mitigated these risks?
- Can any of these risks be completely eradicated?
Like any other organization, bank face various people risk in their daily operations. These are mainly in the form of human capital risks. Employee turnover, for instance, is a risk that banks have been accustomed to. This is in cases where employees leave the company during their most productive period. In this case, some might end up sharing information that might undermine the secrecy of the bank or even conspire with criminals to defraud the bank (DeAngelo & Stulz, 2015). Additionally, the bank faces other risks like, occupational fraud, where rogue employees execute actions that are against bank regulations or compliance hence causing the bank to incur losses. Banks also face the risk of losses resulting from wrong entries of data by the staff. This can happen either willingly or unconsciously.