The Mechanics of Operational Risk

IFF Training

How long?

  • 14 weeks
  • online

IFF Training


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About the course

Course Structure

The course takes place over 14 weeks and comprises seven core units. The units will be released every two weeks from the start of the course.

Assessment & Post Graduate Certification

At the end of each unit there is an assessment that will allow you to benchmark your growth in knowledge and understanding. For those wishing to receive a Post Graduate Certificate from Middlesex University, an additional marked assignment of 5000 words will also need to be submitted.

Video Content

Each unit is now complimented by videos from the course director, Clive Corcoran, taking you through the components of the course with particular emphasis on complex areas.

Case Studies, Worksheets & Practical Examples

As well as videos and module content, the course has an abundance of supporting course material to help you understand the complex risk management subject

Syllabus modules

Unit 1 – Big Picture Overview

  • Distinguish operational risk from other kinds of financial risks
  • Understand the core concepts involved in risk governance
  • Recognise the adverse consequences, including reputational damage and penalties, that arise from operational failutes
  • Understanding the distinction between macro and micro level Key Risk Indicators (KRIs)
  • Understand how Value-at-Risk (VaR) can be applied to operational risk
  • Recognise how issues related to misconduct will impact the firm

Unit 2 – People and Conduct

  • Understand the importance of a code of conduct in corporate governance
  • Appreciate the need for a diversity of perspectives within human resources
  • Recognise the role of accountability within various episodes of misconduct - including the LIBOR rigging scandal
  • Understand the reasons that make possible unauthorised transactions (rogue trading) and what steps can be taken to curtail such possibilities

Unit 3 – Software and Model Risk

  • Understand the core concepts in the architecture of enterprise software, especially systems integration and security issues
  • Understand the key principles of cyber security
  • Understand the key elements in new software technologies including blockchain, artificial intelligence, and cloud computing
  • Understand the micro-structure of markets, their fragmentation and the nature of automated trading
  • Explain the risks associated with high frequency trading (HFT)

Unit 4 – Data Security and Business Processes

  • Identify the principal sources of cyber risk - internal and external
  • Understand the risks associated with introducing new business systems and how these need to be thoroughly tested before deployment
  • Analyse the risks associated with introducing new products and how these need to be thoroughl tested before deployment
  • Understand the nature of business process re-engineering (BPR)
  • Undertake diagnostics relating to possible operational loss scenarios

Unit 5 – Compliance and Regulatory Change

  • Describe the principal kinds of regulatory initiatives
  • Understand the focus on consumer protections in much regulatory policy in the financial sector
  • Recognise the growing focus amongst the regulatory community on macro-prudential tools of risk management
  • Articulate the key revisions to the regulatory framework for banking in the UK since 2007/8 financial crisis

Unit 6 – Quantification, Scenario Analysis and Mitigation

  • Understand the usefulness of a Pareto statistical distribution in calibrating extreme values
  • Recognise the limitations of internal loss data from previous operational mishaps
  • Understand the value of a strategic risk management philosophy and cultivation of an ethos of prudence and robust risk control
  • Understand the nature of power laws in financial modelling
  • Demonstrate competence in generating adverse scenarios for analysing how to control and mitigate operational losses

Unit 7 – Risk Culture and Governance

  • Identify the characteristics which give rise to a poor risk culture
  • Understand the dynamics of organisational change and how to impact the risk culture
  • Recognise that the risk governance philosophy should be fully integrated into all accounting, surveillance, IT systems and internal audit functions
  • Understand why "group think" can lead to poor risk governance


Clive Corcoran

Clive Corcoran has been engaged in the finance and asset management sectors, on both sides of the Atlantic, for more than 25 years. After completing his education in the UK, Canada and the US, he co-founded and became the CEO of an asset management company based in the USA during the 1980s and 90...

Videos and materials

The Mechanics of Operational Risk at IFF Training

From  2831 GBP$3,804

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Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

Full disclaimer.

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