The 2019 Annual Meetings of the African Development Bank Group will be held from 11-14 June 2019, in Malabo, Republic of Equatorial Guinea. Find out more
Operational risk is defined as losses due to process, system or human failures, unexpected events or unenforceability of contracts. This class of risks has unlimited downside and can expose an institution to serious financial and reputational losses, as evidenced in recent well-publicized large corporate failures around the world. Similar to other financial institutions, the Bank is exposed to various types of operational risk, including the potential losses arising from internal activities or external events caused by breakdowns in information, communication, physical safeguards, business continuity, supervision, transaction processing, settlement systems and procedures and the execution of legal fiduciary and agency responsibilities.
The Bank Group’s operational risk activities currently comprise improvements in the systems environment and process changes and are expected to also include the implementation of an integrated control framework. Over the last several years, the Bank Group has implemented wide-ranging reforms intended not only to improve the efficiency with which the Bank Group executes its mandate, but also to strengthen the overall internal control environment. Such reforms have included the following:
Process related reforms
There has been a significant renewal of the information technology environment of the Bank Group, including the following:
External Events-induced changes
The Bank has a proven business continuity and disaster preparedness plan, to assure the immediate continuity of all essential operations in the aftermath of a disaster and the eventual continuity of all other operations. This plan is continuously updated and tested to assure ongoing readiness.
Each of the reform measures described above has contributed towards improving the overall operational risk profile of the Bank Group.