Operational risk management (ORM) training is specialized instruction in loss-prevention strategies for risks that businesses and organizations may encounter. These risks incorporate a variety of areas, including fraud, employee error, system failures, terrorism, and natural disasters. Programs that provide operational risk management training vary widely, depending on the needs and risk areas of the organization or business. Candidates who complete the ORM training may take an examination to demonstrate their competence in operational audit standards, internal controls, documentation policies, and risk management tools. If they successfully pass the examination, they can earn a certification as a certified internal auditor (CIA), certified public accountant (CPA), or certified management accountant (CMA).
Many executives in top management pursue risk control certification to acquaint themselves better with industry-specific risk mitigation and management tools. Most operational risk management training programs that lead to certification in ORM require potential candidates to have a degree in risk management, accounting, or finance. Furthermore, candidates need to have at least two years of related work experience before they are eligible for the programs. Some programs require that candidates work under the close supervision of an experienced, senior-level operational risk manager for a period.
Risk management classes are also available at many colleges and universities in their business and finance departments. In addition, several organizations offer online operational risk management training courses. Although these classes do not lead to certification, the information derived from them can not only equip a company executive to deal with threats of catastrophic operational breakdowns and glitches, but also the company may be able to negotiate lower insurance rates, once ORM plans are in effect. In addition, stockholders who demand security for their investments will have an enhanced level of comfort with a company, knowing that the company has a plan to identify and deal with all events that could hinder business.
Banks, in particular, face increased operational risks due to deregulation, globalization, and technological changes. The Basel Committee on Banking Supervision (BCBS), as part of capital adequacy requirements, has begun to impose a charge on banks for intrinsic and extrinsic risks in the banking system. These risks include a wide range of threats, including data entry errors, software disruptions, fiduciary breaches, hacking, and internal fraud. Operational risk management training enables bank officials to collect data on losses and calculate the amount of money that the bank should maintain in reserve to cover future losses.