Operational Risk in Financial Services: A Review and New Research Opportunities

41 Pages Posted: 18 Aug 2016

See all articles by Yuqian Xu

Yuqian Xu

University of Illinois at Urbana-Champaign - College of Business

Michael Pinedo

New York University (NYU) - Leonard N. Stern School of Business

Mei Xue

Boston College - Carroll School of Management

Date Written: August 14, 2016

Abstract

The financial services industry differs from other service industries in ways that affect the nature of the operational risks it is subject to. In recent decades, many books and papers have focused on operational risk in financial services. However, the literature has focused mainly on the conceptual and statistical aspects of operational risk management and not on its operational aspects. Operational risk in financial services has not received much attention from the operations management community. This paper is based on the premise that operational risk in financial services can reap significant benefits from research done on the theory and practice of operations management in other industries. Moreover, the particular challenges and questions raised in the practice of operational risk management may stimulate future research in this particular domain of operations management. We provide a framework to describe and analyze operational risk from an operations management perspective, focusing in particular on process design, process management and human behavior aspects.

Keywords: Operational Risk, Process Design, Process Management, Human Induced Risks

Suggested Citation

Xu, Yuqian and Pinedo, Michael and Xue, Mei, Operational Risk in Financial Services: A Review and New Research Opportunities (August 14, 2016). Available at SSRN: https://ssrn.com/abstract=2823166 or http://dx.doi.org/10.2139/ssrn.2823166

Yuqian Xu (Contact Author)

University of Illinois at Urbana-Champaign - College of Business ( email )

Champaign, IL 61820
United States

Michael Pinedo

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Mei Xue

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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