Unit 28: Operational Risk and Incident Management

Where This Unit Fits

Unit 28 builds on prior risk and compliance units by focusing on operational risk events, incident management workflows, and processes for improving resilience in wealth and asset operations.

Unit Overview

Students explore operational risk types, identify and log incidents, perform root cause analysis, develop business continuity and disaster recovery plans, monitor operational risk metrics, and implement lessons learned for process improvement.

Why This Matters in Wealth & Asset Operations

Operational risk management safeguards client assets, ensures business continuity, and prevents financial and reputational losses. Professionals who understand these processes can respond to disruptions efficiently, reduce downtime, and improve organizational resilience.

What You'll Learn

Core Concepts

• Types of operational risk in financial operations
• Incident identification and logging procedures
• Root cause analysis and corrective action planning
• Business continuity planning and disaster recovery systems
• Operational risk monitoring and reporting
• Process improvement and lessons learned
• Integration of risk controls into workflows

Operational Competencies

• Identify and classify operational risk events
• Log incidents and maintain traceable records
• Perform root cause analysis and design corrective actions
• Develop and test business continuity plans
• Implement disaster recovery procedures for critical systems
• Monitor risk metrics and prepare reports
• Apply lessons learned to improve operational processes

Institutional Questions This Unit Helps Answer

• How can firms identify and mitigate operational risk?
• What processes ensure proper incident documentation and traceability?
• How are root cause analyses conducted to prevent recurrence?
• How do business continuity and disaster recovery support operational resilience?
• How can operational risk monitoring improve performance and prevent losses?

Lessons in This Unit

• Lesson 28.1: Types of Operational Risk

  Understand the different categories of operational risks in wealth and asset operations.

• Lesson 28.2: Incident Identification and Logging

  Learn methods for detecting operational incidents and maintaining detailed logs.

• Lesson 28.3: Root Cause Analysis

  Explore techniques to determine underlying causes of operational failures and incidents.

• Lesson 28.4: Business Continuity Planning

  Study frameworks to ensure operations continue under disruption scenarios.

• Lesson 28.5: Disaster Recovery Systems

  Examine systems and procedures for recovering critical functions after failures.

• Lesson 28.6: Risk Monitoring and Reporting

  Learn to track key risk indicators and communicate risk exposures effectively.

• Lesson 28.7: Incident Response Integrity, Failure Propagation, and Risk Control

  Learn how operational risk management functions as a unified control system across risk identification, incident logging, root cause analysis, continuity planning, recovery systems, and risk monitoring. This capstone shows how failures propagate into disruptions and control breakdowns, and how detection, escalation, remediation, and feedback loops form a closed-loop system ensuring operational resilience and risk control integrity.

Practical Application

Upon completion, students can identify, log, and analyze operational incidents, implement continuity and recovery plans, monitor risk, and apply process improvements to strengthen organizational resilience.

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