Operational Risk Management (ORM) is a systematic process aimed at recognizing, evaluating, and addressing the operational risks confronting an organization. It involves establishing a comprehensive framework and executing strategies to alleviate the consequences of potential events that might impede the realization of an organization’s objectives.

An Operational Risk Framework serves as a methodical approach utilized by organizations to pinpoint, analyze, and control operational risks effectively. This structured framework encompasses distinct stages, including processes for the identification of risks, in-depth assessment, strategic risk mitigation, and continual monitoring.

Through the implementation of an Operational Risk Framework, organizations can proactively navigate and alleviate the operational risks in their purview. This approach provides a well-organized and strategic method to guarantee that risks are not only identified and evaluated but also managed in a manner that aligns seamlessly with the organization’s strategic objectives, safeguarding its holistic well-being.

The Operational risks are those associated with the internal processes, systems, people, and external events that may impact an organisation’s ability to achieve its objectives.

The Operational Risk Management Framework provides a set of guidelines, policies, processes, and tools to effectively manage and control operational risks across an organisation.

What is a Risk Framework? Risk Framework Definition

An Operational Risk Management Framework is a well-defined structure that guides an organisation in systematically managing and mitigating risks associated with its daily operations. It involves creating a risk-aware culture, implementing control measures, and learning from incidents to continuously improve risk management practices.

The Operational Risk Management Framework is a systematic approach adopted by businesses to understand, evaluate, and manage risks related to their operational activities. It encompasses strategies for risk identification, assessment, response, and ongoing monitoring, contributing to the organisation’s overall risk management strategy and resilience.

The Operational Risk Management Framework is a systematic approach adopted by businesses to understand, evaluate, and manage risks related to their operational activities. It encompasses strategies for risk identification, assessment, response, and ongoing monitoring, contributing to the organisation’s overall risk management strategy and resilience.

Risk framework Types

Operational Risk Management (ORM) frameworks can vary based on the specific needs, industry, and characteristics of an organisation. However, several common types of Operational Risk Management frameworks are recognized across different sectors. Here are some types:

  1. Enterprise-Wide Operational Risk Management Framework: A comprehensive framework that addresses operational risks across the entire organisation. It considers risks associated with people, processes, systems, and external factors on an enterprise-wide scale.
  2. Industry-Specific Operational Risk Management Framework: Tailored Operational Risk Management frameworks designed to address operational risks specific to certain industries, such as banking, healthcare, or manufacturing. These frameworks take into account industry regulations, standards, and unique operational challenges.
  3. Technology Risk Management Framework: Focused on managing operational risks related to technology and information systems. This framework addresses risks associated with cybersecurity, data breaches, technology failures, and other technology-related disruptions.
  4. Risk management framework for financial institutions: Specific to the financial services industry, this framework is designed to manage operational risks related to banking, investment, and other financial activities. It includes elements like credit risk, market risk, and compliance risk.
  5. Healthcare Operational Risk Management Framework: Tailored for the healthcare sector, this framework addresses operational risks specific to patient care, regulatory compliance, data security, and the unique challenges of healthcare operations.
  6. Project Risk Management Framework: Focused on managing operational risks associated with specific projects. This framework helps organisations identify and mitigate risks that may impact the successful completion of projects.
  7. Supply Chain Risk Management Framework: Addresses operational risks within the supply chain, considering factors such as disruptions in the supply chain, vendor risks, and dependencies on external partners.
  8. IT Governance and Risk Management Framework: Focused on managing operational risks associated with information technology governance. It includes elements such as IT governance, IT risk management, and cybersecurity.
  9. Comprehensive Operational Risk Management Framework: Encompasses a broad range of operational risks and is not limited to a specific industry or sector. This type of framework provides a holistic approach to managing various operational risks that an organisation may face.
  10. Regulatory Compliance Operational Risk Management Framework: Specific to managing operational risks associated with regulatory compliance. This framework helps organisations ensure that they adhere to relevant laws and regulations in their operational activities.

 Risk framework examples:

Various recognized risk frameworks provide organizations with structured approaches to effectively manage and mitigate risks. The COSO Enterprise Risk Management (ERM) framework is comprehensive, aligning risk management with organizational strategy. ISO 31000 is an international standard offering principles and guidelines applicable to any organisation. NIST SP 800-37 outlines a structured process for managing information security risks in federal systems, while FAIR focuses on quantifying information security and operational risks. ISO/IEC 27001, a standard for Information Security Management System (ISMS), integrates risk management. PRINCE2, a project management framework, includes risk management throughout the project lifecycle. ITIL, a framework for IT service management, addresses risks associated with IT services. BS 31100, a British standard, provides guidance on risk management principles. The Risk Management Framework (RMF) for Federal Agencies by NIST guides information security risk management in U.S. federal systems. TOGAF, primarily an enterprise architecture framework, includes considerations for managing risks associated with architectural decisions. Organisations choose frameworks based on industry, regulatory compliance, and specific needs, often adapting and customising them for optimal effectiveness.

Uses of Risk frameworks:

The primary use of risk frameworks is to establish a structured and proactive approach to risk management, providing a systematic process for identifying potential threats and opportunities. These frameworks guide organisations in prioritising risks based on their potential impact and likelihood, facilitating informed decision-making. Organisations employ various risk frameworks to navigate uncertainties and safeguard their operations.

A business risk management framework is instrumental in mitigating risks associated with internal processes, systems, and external events. It aids in strategic decision-making by prioritising risks based on their potential impact. Simultaneously, a data risk management framework focuses on safeguarding sensitive information, ensuring data privacy, and preventing breaches. Compliance risk assessment frameworks assist organisations in adhering to industry regulations and standards, reducing the likelihood of legal and regulatory issues. Additionally, an issue management framework enables systematic tracking and resolution of operational incidents and challenges, promoting continuous improvement. Together, these frameworks contribute to a holistic risk management strategy, enhancing organisational resilience and fostering a proactive approach to addressing diverse risk factors.


In conclusion, the importance of Operational Risk Management (ORM) frameworks lies in proactively managing operational risks to enhance organisational resilience and ensure long-term success.

The adoption of comprehensive risk frameworks is imperative for organisations seeking to thrive in an environment fraught with uncertainties. These frameworks, including business risk management, data risk management, compliance risk assessment, and issue management frameworks, provide systematic approaches to identifying, assessing, and mitigating risks across various dimensions of an organisation.

MitKat’s flagship operational risk monitoring dashboard – DataSurfr.ai – provides a seamless way of prioritising risks, fostering a risk-aware culture, and ensuring compliance with industry standards. It also enables informed decision-making and enhances overall organisational resilience. The strategic implementation of risk frameworks contributes to minimising financial losses, reputational damage, and operational disruptions. As organisations navigate an ever-evolving landscape, these frameworks serve as invaluable tools, guiding them towards proactive risk management and sustainable success.

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