BANK'S OPERATIONAL RISK MANAGEMENT MECHANISMS IMPROVEMENT

Abstract

The article examines the mechanisms and methods of operational risk management in Ukrainian banks. It is determined that operational risk is a complex type of banking risk, and the peculiarity of its implementation is that it is inherent in all banking processes, products, business lines and activities and has an unpredictable nature. It is proved that the improvement of operational risk management contributes to the sustainable functioning of banks and the stability of the entire banking system.
The main principles of the bank's operational risk management system formation and functioning are determined, which include: objectivity and regularity of risk identification and assessment; timeliness of their detection and evaluation; complexity; structured management; proportionality; delimitation of control functions and operational activities; independence of individual governing bodies; confidentiality; transparency and efficiency.
Given the complex and dynamic nature of operational risks, as well as the active digitalization of the banking business, it is recommended that operational risks include reputational risks, information risks and cyber risks.
Based on the calculations, it is established that the impact of operational risks on the performance of domestic banks tends to increase, the leveling of which requires the development of new management mechanisms through the creation and effective operation of operational risk management.
A system of measures to improve operational risk management based on the use of the «three lines of protection», which includes classification, identification, measurement, monitoring, control and reporting of operational risks, as well as assessment of economic and social consequences of risk events.
The main methods of operational risk management are identified and it is proved that the key direction of their use should be preventive measures to avoid or minimize the economic consequences of risks, and coverage of losses arising from their implementation should be provided by specially formed reserves of internal capital.
An indicative list of key indicators has been developed and approaches to characterizing operational risk events that can be used by domestic banks in practice to minimize the consequences of operational risks have been improved.