Operational Risk | Governance | Regulatory Compliance
Operational Risk Management Advisory
Design and implementation of operational risk management frameworks, Risk and Control Self-Assessments (RCSA), Key Risk Indicators (KRIs) and operational resilience practices.
IO Consulting helps organizations identify, assess, monitor and manage operational risks, strengthen internal controls and support risk-informed decision-making.
Why Operational Risk Management Matters
Process failures, human errors, fraud, technology incidents and external or supplier disruptions can cause financial loss, interrupted services, regulatory non-compliance and reputational damage. Structured risk management connects these exposures to accountable decisions.
- 01
Risk Visibility
Structured identification and assessment.
- 02
Control Effectiveness
Stronger preventive and detective controls.
- 03
Management Oversight
Clear accountability and risk reporting.
- 04
Operational Resilience
Better preparedness for disruption.
Who We Support
Scope is tailored to legal status, activities, size and risk profile. These sectors do not share identical regulatory obligations.
- 01
Commercial Banks
Coordinate process, control and loss-event oversight.
- 02
Microbanks
Build proportionate governance for banking operations.
- 03
FinTech and Payment Service Providers
Manage dependencies across products and payment flows.
- 04
Microfinance Organizations
Strengthen controls in lending and servicing processes.
- 05
Insurance Companies
Address policy administration, claims and supplier risks.
- 06
Energy and Critical Infrastructure
Protect continuity of essential services.
- 07
Telecommunications
Manage network, service and third-party dependencies.
- 08
Other Organizations
Structure oversight of complex operational processes.
Operational Risk Management Service Scope
This engagement provides advisory and implementation support, not an independent audit opinion. Scope and responsibilities are agreed before work begins. Any separate audit requires its own independence and conflict-of-interest assessment.
- 01
Operational Risk Management Framework
Risk policy and appetite; governance and the Three Lines Model; roles, responsibilities and risk ownership; escalation and management reporting.
- 02
Risk and Control Self-Assessment (RCSA)
Identify processes and map risks and controls. Assess inherent risk, control design and operating effectiveness, then residual risk. Assign owners and corrective actions.
- 03
Operational Risk Taxonomy
Create consistent categories for process, people, technology, external-event, fraud and third-party risks so teams classify and compare exposures consistently.
- 04
Key Risk Indicators (KRIs)
Design indicators, thresholds and escalation triggers aligned with risk appetite. Define monitoring frequency, data owners, dashboard requirements and management reporting.
- 05
Operational Loss Event Management
Identify, register and classify events and financial impacts. Capture near misses, investigate root causes, assign corrective actions and analyze historical trends.
- 06
Risk Appetite and Tolerance
Develop risk appetite statements, tolerances, limits and escalation thresholds. Establish management approval, ownership and periodic review arrangements.
- 07
Scenario Analysis and Stress Testing
Explore severe but plausible cyber incidents, payment disruptions, supplier outages, internal fraud and technology failures. Assess financial and operational impacts. Advisory scenarios are not automatically formal regulatory stress tests; those require separately agreed criteria and methods.
- 08
Third-Party and Outsourcing Risk
Classify suppliers and critical dependencies. Review contractual controls, outsourcing oversight, concentration risk, supplier incidents and exit planning.
- 09
ICT, Cyber and Fraud-Related Operational Risks
Connect technology disruptions, cyber incidents, information security failures, payment and internal fraud with process integrity and incident escalation. Specialized cybersecurity audits and penetration testing are separately scoped services.
- 10
Operational Resilience and Business Continuity
Identify critical business services and undertake Business Impact Analysis. Connect continuity plans, recovery objectives, disaster recovery dependencies, incident management and resilience testing.
Regulatory Requirements & International Frameworks
Binding Georgian obligations and voluntary international guidance serve different purposes. Applicability depends on the institution and activity; Basel principles do not automatically impose legal requirements on every Georgian financial institution.
International Frameworks
- Basel Committee — Principles for the sound management of operational risk and operational resilience (2021).
- ISO 31000:2018 — Risk management guidelines.
- COSO ERM — Integrating risk with strategy and performance.
- COBIT 2019 — Governance and management of enterprise information and technology.
- ISO/IEC 27001:2022 — Information security management systems.
- ISO 22301:2019 — Business continuity management systems.
Georgian Financial Sector
- Commercial banks — NBG Order No. 47/04 of 13 June 2014 approves the regulation on operational risk management by commercial banks. The current consolidated text and amendments must be checked for the engagement.
- Risk management and internal controls — Map applicable governance, ownership and reporting requirements to the institution’s processes.
- Microbanks and payment providers — Review the rules applicable to the specific licence, registration and activities rather than transferring commercial-bank obligations unchanged.
- Technology, outsourcing and continuity — Identify applicable cybersecurity, supplier oversight and business continuity obligations. Operational risk advisory is not automatically a mandatory external audit.
Our Engagement Approach
- 01
Context and Governance Assessment
Understand structure, processes and existing risk management practices.
- 02
Risk Identification and RCSA
Identify operational risks and assess associated controls.
- 03
Framework and Tool Development
Develop methodologies, taxonomies, registers and indicators.
- 04
Implementation Support
Help risk owners and management apply the framework.
- 05
Monitoring and Improvement
Define reporting, periodic assessments and improvement mechanisms.
What Your Organization Receives
Specific deliverables depend on the agreed engagement scope.
- 01
Operational Risk Management Framework
Policy, methodology, roles and governance arrangements.
- 02
RCSA and Risk Register
Documented risks, controls and assessment results.
- 03
KRI Framework
Indicators, thresholds, monitoring and escalation arrangements.
- 04
Operational Loss Event Register
Structure and procedures for recording and analyzing incidents and losses.
- 05
Improvement Roadmap and Management Reporting
Prioritized actions, responsibilities and management-level reporting.
Why IO Consulting?
- 01
Integrated Risk and Technology Expertise
Connect operational, technology and cybersecurity risks.
- 02
Financial Sector Regulatory Knowledge
Structure work around relevant financial-sector regulatory frameworks.
- 03
Practical Implementation
Develop methodologies, registers and controls for operational use.
- 04
Audit-Oriented Approach
Traceable evidence, clear accountability and management-ready reporting; advisory does not become an independent audit.
Frequently Asked Questions
What is operational risk management?
Operational risk management is the structured identification, assessment, monitoring and treatment of risks arising from processes, people, systems and external events. It connects risk ownership, controls and escalation with business objectives. A practical framework uses incident data, assessments and management reporting to prioritize action and improve how services operate.
What is RCSA?
Risk and Control Self-Assessment is a structured process in which business owners identify risks and assess the controls used to manage them. It considers inherent risk, control design, operating effectiveness and residual exposure. Results inform a risk register, accountable action owners and improvement priorities; self-assessment is not an independent audit opinion.
How are operational risks assessed?
Assessment starts with critical processes, dependencies and plausible failure events. Teams consider likelihood and impact, review incident history and evidence of control performance, and assess residual exposure against agreed criteria. Workshops, scenario analysis and data support judgment. The method should fit the organization’s scale, activities and available evidence rather than promise numerical certainty.
What are KRIs and how are they used?
Key Risk Indicators are measures that help identify changes in risk exposure or control conditions. Each useful KRI needs a clear definition, reliable data, an owner, review frequency and thresholds linked to risk appetite. Breaches trigger investigation or escalation. Indicators support informed decisions; they do not replace assessment or guarantee that incidents will be prevented.
How does operational risk management relate to cybersecurity and business continuity?
Cyber incidents and technology failures can disrupt business processes and create operational losses. Operational risk management connects these exposures with ownership, controls and reporting; business continuity addresses how critical services continue or recover. Specialist cybersecurity testing and independent audits remain separately scoped engagements, while shared scenarios and dependency mapping help coordinate the disciplines.
What deliverables does IO Consulting provide?
Depending on the agreed scope, deliverables include a risk management framework, RCSA and risk register, KRI framework, loss event register, and improvement roadmap with management reporting. Each should define responsibilities and practical next steps. The engagement also specifies implementation support, review arrangements and acceptance criteria so that documents can be used in daily operations.
Strengthen Your Operational Risk Management
IO Consulting helps organizations establish operational risk frameworks, implement RCSA, develop KRIs and improve internal controls.
Request a Consultation