At EXYGE, we understand that operational risk management is critical to stability and success in the financial industry and other sectors. Our projects are designed to identify and mitigate vulnerabilities, applying robust methodologies such as ISO 31000 and some of its tools, such as the FMEA for Risk and advanced automation and process mining tools, thus reducing the possibility of errors, financial losses and reputational damage.
ISO 31000 and the COSO framework are two widely recognized approaches to risk management, but they have fundamental differences in their structure and applicability. ISO 31000 is an international standard that provides principles, guidelines and a generic process for managing risk in any type of organization, regardless of size or industry. It focuses on being flexible and adaptable, easily integrating into existing management systems and allowing organizations to customize it to their specific needs. On the other hand, COSO, while also robust, is more oriented towards an internal and financial reporting approach, and its framework is more rigid, which can make it difficult to apply in broader sectors and operational contexts. In addition, COSO tends to be more prescriptive and less intuitive for organizations that don’t have a solid foundation in integrated risk management.
ISO 31000 is our preferred framework for operational risk management due to its practical, flexible and universal approach. In addition to its adaptability, ISO 31000 prioritizes value creation by integrating into strategic and operational processes, fostering an organizational culture based on informed decision-making. This standard not only allows risks to be managed, but also to identify opportunities, becoming a strategic tool for innovation and sustainable growth. Its clear language, principled approach, and alignment with international standards make it easy to understand and apply at any organizational level. In contrast, COSO, while valuable, can be more complex and less efficient in encompassing the diversity of operational risks that organizations face in dynamic and globalized environments. For these reasons, ISO 31000 stands out as the ideal framework to ensure effective risk management aligned with the strategic objectives of an organization in any sector or industry.
Why Is Operational Risk Reduction Important?
Operational risk encompasses human error, failures in processes and systems, and external events that can negatively impact an organization’s operations. Ineffective management can lead to:
- Significant financial losses.
- Erosion of the relationship with customers.
- Costly regulatory penalties.
- Deterioration of business reputation.
At EXYGE, we help organizations implement effective controls that ensure operational continuity, efficiency, and regulatory compliance.
How do we do it?
Our Operational Risk related projects combine international methodologies, advanced technology and expertise in critical processes:
- Operational Risk Assessment (ISO 31000)
- We conduct a comprehensive analysis of operational processes to identify areas of vulnerability, potential risks, and potential mitigation measures.
- We create risk management policies, procedures and tools adjusted to the reality and needs of the client company.
- We use the ISO 31000 methodology to structure and prioritize risk management, ensuring full coverage aligned with global standards. In some cases, this leads to the creation of a Risk Management Manual adjusted to the particularities of the company.
- We work on practical tools such as the FMEA for Risk and transfer knowledge so that the client’s staff gain confidence and autonomy in maintaining habits of continuous improvement.
- Process Mapping and Mining
- We apply Process Mining tools to map and visualize the actual flow of operations, identifying bottlenecks, patterns leading to exceptions and non-conformities, points of failure in processes, and critical tasks that require greater control.
- This methodology allows deviations to be detected and processes to be optimised to minimise errors, making it possible, if necessary, to maintain these controls in real time.
- Automation of Operational Controls
- We implement automation technologies (RPA, BPM, and other) to reduce manual intervention and human risk in repetitive tasks.
- We design automated controls that ensure consistency, traceability, and efficient execution of key processes.
- Compliance Management
- We develop and implement policies and procedures that ensure compliance with regulations in areas such as financial management, shared services, and banking operations.
- We assist in the creation of automated regulatory reports (FATCA and CRS) to comply with international agreements and local compliance regulations.
- Risk Monitoring and Reporting
- We implement continuous monitoring systems, alerts and risk dashboards with key indicators (KPIs) that allow us to act proactively against threats.
- We design contingency and mitigation plans aligned with the needs of the business.
Results We Generate
- Significant reduction of operational risk through robust controls and automation.
- Early detection of vulnerabilities, reducing the possibility of financial losses.
- Effective regulatory compliance, avoiding penalties and reputational damage.
- Increased operational efficiency by eliminating manual errors and optimizing critical processes.
- Improved relationship with customers and stakeholders thanks to more stable and reliable operations.
Benefits of Managing Operational Risk
- Reduction of errors and failures in key processes.
- Protection of the reputation and trust of customers and investors.
- Compliance with international and regulatory standards.
- Greater control and visibility across the entire chain of operations.
At EXYGE, we transform operational risk management, strengthening your organization’s stability and protecting your reputation through the application of global standards, automation, and advanced technologies.
We have carried out countless projects where we incorporate risk management as a normal part of the review of how an organization works, from identifying potential areas of operational risk, for regulatory purposes in financial institutions to designing a risk management system in an NGO with high reputational vulnerability.
We favor the use of ISO 31000 because as a methodology it allows great flexibility, adapting to the size and complexity of the risk management system that the organization can maintain efficiently. The secret to efficient risk management is that it is incorporated as an inherent part of the way things are done, so the system cannot be a heavy additional burden that competes with the other priorities of the business.
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