Using operational risk frameworks for managing fraud risk

Article

A comprehensive look at the transformation of fraud management within financial institutions over the past decade, highlighting the pivotal role of operational risk frameworks in enhancing understanding, assessment, and mitigation strategies for fraud risks.

04/12/2023

Chris Hubbard, Head of Fraud, Anti-Bribery & Corruption, and Tax Evasion, Danske

Using operational risk frameworks for managing fraud risk

Tracing the evolution of fraud risk management over the past 15 years, the narrative unveils a landscape marked by dynamic changes in strategies, technologies, and regulatory priorities within financial institutions.
With a shift towards embedding fraud management within operational risk frameworks, this elucidates the practical benefits of this approach in fostering a holistic understanding, assessment, and mitigation of fraud risks.
Shedding light on the operational risk frameworks' utility illustrates their role in enabling detailed risk taxonomy development, inherent risk assessments, and the implementation of effective control measures.
Advocating for future advancements, the adoption of total cost of ownership models and industry-wide performance scoring systems will propel fraud risk management into a more proactive and comprehensive realm.