Operational Risk Management System with Statistical Control
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The document outlines a final year project focused on enhancing the operational risk management system at Dah Sing Bank. It presents solutions to improve data accessibility and streamline processes through a Microsoft Access database and statistical control methods. The project aims to automate report generation and improve data interpretation for better risk management across departments.
Operational Risk Management System with Statistical Control
- 1. Operational Risk Management System with Statistical Control Final Year Project Dah Sing Bank Operational Risk Management Team Kevin Chua Dorothy Kwok Advisor Prof. Fugee Tsung, Dr. Wei Jiang Teaching Assistant Maggie Ning Group Members Yin Ping Ip Shaw Liang Alex Yap Cho Wing Yan Yim Ming Tse
- 2. Background Operational Risk Management Team (ORMT) Monitor risk level in Operation Key Risk Indicator(KRI) Monitoring System Quantifies risk level of each department 3 users: Coordinator, Manager, ORMT X 86 reports Dept Manager Dept Coordinator ORMT
- 3. Problem Statement Poor data accessibility Subjective & Passive control Poor in data interpretation Tedious process/ Non-value added Manager Coordinator ORMT KRI Report
- 4. Solution Microsoft Access Database Management System A Comprehensive Package of Solutions Statistical Control
- 5. Streamlined Process Slide Streamlined Process Data Analysis Auto-Report Compilation Sustainable Design Statistical Control Streamlined Process
- 6. Current procedure Coordinator Manager Coordinator
- 7. Current procedure 6 Coordinator Manager Coordinator
- 8. Current procedure 6 Coordinator Manager ORMT
- 9. Current procedure 6 Coordinator Manager Coordinator ORMT Coordinator
- 10. Improvement 7 Before After Working on the same platform 20 10
- 11. Streamlined Process ORMT Manager Coordinator 8
- 12. Data Analysis 9 Streamlined Process Data Analysis Auto-Report Compilation Sustainable Design Statistical Control
- 13. Improvement Identify trend in data Compare KRI records across departments Observe relationship between KRIs Graphical illustration: Chart and Scatter Plot More effectively 10 Eye balling Time consuming Poor performance Before After
- 14. 1. KRIs Report 11
- 15. KRIs Report 12
- 16. 2. Comparing a KRI across departments 13
- 17. Comparing a KRI across departments 14
- 18. 3. KRIs Comparison 15
- 20. Automated Report Compilation 17 Streamlined Process Data Analysis Auto-Report Compilation Sustainable Design Statistical Control
- 21. Improvement Prepare quarterly report Automated report generation 18 Report compilation were done manually Before After
- 22. Monthly and Quarterly Report 19
- 23. Sustainable Design 20 Streamlined Process Data Analysis Auto-Report Compilation Sustainable Design Statistical Control
- 24. Sustainable Design 21 Solution Changes in Human Resources Maintaining the KRI Library
- 26. Human Resources 23 Department Staff
- 27. Maintain KRI Library 24
- 28. Maintain KRI Library 25
- 29. Statistical Control on KRI 26 Streamlined Process Data Analysis Auto-Report Compilation Sustainable Design Statistical Control
- 30. Improvement Control limits are decided by e x perience KRI are monitored individually Introduce statistical control approach to control KRI Methodology that monitor 2 KRI simultaneously Before After 27
- 31. Approach 1: Hotelling T 2 Control An existing Multivariate Control Chart x y Historical data Out of control points: action needed Monitoring data 28
- 32. Approach 1: Hotelling T 2 Control Implementation Suggestion Verify their relationship in the system Step 2 Step 3 Phase 1: Establish the control Phase 2: Monitoring the data Identify 2 correlated KRI IT Failure New Employee Step 1 Step 4 29 Time Line
- 33. Approach 1: Hotelling T 2 Control Implementation Suggestion Step 3 Phase 1: Establish the control Phase 2: Monitoring the data Step 4 29 Time Line
- 34. Approach 2: Operational Loss Control Establish control limits on 2 KRI values by a measurable managerial decision: Operational Loss Region: Operational Loss > Target Loss KRI 1 KRI 2 Relationship between 2 effective KRIs Occurrence of Incidents A Operational Loss type A Target Operational Loss per month for A, $ XX,XXX 30
- 35. Approach 2: Operational Loss Control 31
- 36. Approach 2: Operational Loss Control 31
- 37. Approach 2: Operational Loss Control 31
- 38. Conclusion 32 KRI Monitoring System The Online KRI Monitoring System The Excel designed for Hotelling T 2 Control A complete user manual & guide Deliverables Statistical Control Auto-Report Compilation
- 39. Thank You Q & A