Financial statements issued by national banks revealed that a new comprehensive framework was established to prevent external and internal fraud, which is the commitment of employees to unauthorized activities, or to carry out fraudulent activities related to the activities of the bank in which they work, and also addresses vulnerability to external events and disasters.
According to the disclosure in the financial statements, “operational risks” are defined as the risks of losses arising from deficiencies, failure of operations, employees, systems, or from external events.
The data indicated that the banks have established a framework for operational risks, consisting of policies and procedures for identifying, assessing, monitoring, preparing and reporting on risks and managing them, in addition to reporting, identifying and correcting accidents. The framework also includes reducing risks through insurance where appropriate.
The framework classified the risks into the following categories: “internal fraud”, which means the risks of employees committing unauthorized activities or fraudulent activities, and “external fraud” and means the risks of fraud or violation of system security by an external party, and “employee practices and safety of the work environment” And it includes the poor relationship between employees and discrimination, health and safety risks, as well as "damage to physical assets", and means the risks of banks being affected by disasters.
Among the categories also: “Customers and work products and practices”, meaning the risks of failure to assess the suitability of clients and credit responsibilities, inappropriate work practices, defective products, and “disruption of work and system failures”, and means the risks of not planning and selecting business continuity and recovery of systems in In the event of disasters, and finally: "execution, delivery and operations management", which means the risks of failure to execute transactions and receive customer requests.
She emphasized that the operational risk framework comes within the guidelines and instructions of the Central Bank, to develop risk systems in banks, and to update them in accordance with international best practices.