Okuzeka
Finance & Banking vocabulary · Risk Management

Operational risk

Meaning in finance & banking, with examples

nounCommon term

In finance & banking, operational risk means: The risk of loss from failed internal processes, human error, system breakdowns or outside events such as fraud, cyberattacks or natural disasters.

In Turkish: operasyonel risk

How it is used

Used in risk management, audit and regulation; often shortened to op risk. Banks record operational risk events, run controls and hold capital against it. Examples include a payment sent to the wrong account, an IT outage or a data breach.

Example sentences

  1. The system outage was logged as an operational risk event.

  2. Manual data entry increases operational risk, so we are automating the process.

Common collocations

  • operational risk event
  • operational risk management
  • operational risk capital
  • op risk
  • credit riskThe risk that a borrower or another party will not pay back money it owes on time or in full, causing a loss for the lender.
  • market riskThe risk of losses caused by changes in market prices, such as interest rates, exchange rates, share prices and commodity prices.
  • fraudDeceiving someone to get money or another advantage illegally, such as using stolen card details or opening an account with a fake identity.
  • complianceFollowing the laws, regulations and internal rules that apply to a bank; also the name of the department that checks that this happens.

More terms: Risk Management

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level:

This page explains English vocabulary for learners. It is not financial advice.