Operational risks: trends and challenges

Emelly Anne Silva de Lima and Maria Silene Alexandre Leite

Abstract

The management of operational risk is a critical issue for financial institutions, due to their complex business models and the need to comply with regulatory requirements. The second Basel Accord (Basel II), which was issued by the Basel Committee on Banking Supervision in 2004, provides guidance to central banks and supervisory authorities in member countries. In this context, this study provides a panoramic view of the current state of research on operational risk in financial institutions. With the aim of providing different perspectives, we examine a sample of journal articles through a systematic literature review using VOSVIEWER. Our results indicate a multidisciplinary interest in the topic. Of note are the search to reduce the monetary value of capital for operational risk management (as recommended by Basel II), the cascading response to such events, the recent emphasis on reputational damage to financial institutions, and approaches that make use of artificial intelligence (brought about by advances in technology).