In its Principles for the Sound Management of Operational Risk, the Basel Committee on Banking Supervision states, “In a risk assessment, often referred to as a Risk Self Assessment (RSA), a bank assesses the processes underlying its operations against a library of potential threats and vulnerabilities and considers their potential impact. A key element of a strong operational risk management program, RCSA is an excellent means of assessing operational risks to improve visibility, understanding the risk posture, and identifying control deficiencies. Risk and Control Self-Assessment (RCSA) is an important process for identifying and assessing the key operational risks faced by an organization and the effectiveness of controls that address those risks. Read on to understand RCSA, the key steps of conducting an effective RCSA, and the essential elements that chief risk officers (CROs) must implement to modernize their RCSA program. Risk and Control Self-Assessment (RCSA) is one of the crucial steps in the operational risk management process. the process of identifying, assessing, and monitoring operational risks and associated controls, is being widely applied by organizations to thwart operational disruption and minimize losses. So, it isn’t a surprise when organizations are increasingly considering operational risk management as an integral part of the overall risk management program. According to the data from ORX News, just the top 5 operational risk losses in the first five months of 2022 amount to nearly $8 billion, which include crypto losses due to hacks and fines levied on organizations for misconduct, deceptive practices, and bribery and corruption. Around the world, the escalating number of operational loss events is keeping risk managers up at night.
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