Operational risk management in banking and business forensics

Abstract

In everyday business, banks are exposed to a large number of risks. A special type of banking risk is an operational risk, which due to its form is present in every business activity of the bank. Operational risk represents the risk of loss in the course of business operations, which arise due to inadequate procedures and failed internal processes, human factors, systemic or external events. This is the risk with which scams are most often connected and which tend to develop and take on new forms. Scams not only jeopardize the performance of one bank in terms of its financial status, but significantly affect its reputation. In this paper we discuss the management of operational risk in banking with emphasis on the importance of forensic methods in detecting fraud. The aim of the paper is to point out through the basic theoretical settings and examples from modern banking practice the potential of forensic business in terms of reducing the risk of fraud.