“Current indicators are that Basel Committee on Banking Supervision will introduce capital adequacy charges for Operational Risk by the end of 2004. This capital charge highlights the fact that risk of unexpected losses such as those caused by human error, fraud or systems failure are now far too important to ignore. Now is the ideal time for banks in the Middle East to assess their current operational risk strategy to ensure that a framework is put in place to allow mitigancy against the CA requirement wherever possible.”  Keith Blankley, Managing Director,Euro Banking Solutions.

SOFWIN™ from HSBC Operational Risk Consultancy, a division of HSBC,  is a powerful management tool that allows financial institutions to identify, quantify and manage bank-wide operational risk exposure. This Windows-based application features advanced reporting and risk analysis tools which allow for data relating to internal audit, authorisation and security controls to be systematically collected and consolidated. Drawing from this information, senior management of financial institutions are provided with an accurate self-assessment of their operational risk exposure and can take measures to manage such exposures in addition to capital allocation decisions.

SOFWIN takes a qualitative approach to operational risk exposure, analysis and management. It can be adapted to deliver a customised view of each individual institution. It allows the Institution to:

• examine physical/internal security controls

• examine differences in security levels and procedures

• generate reports from across all banking activities

• examine security exceptions

• prepare crime insurance application forms

With Sofwin, all risk exposure information is presented in a clear, logical and accessible format on the desktop PC.  The systems analytical and reporting tools facilitate comparisons of the existing situation with an ideal profile, or comparisons between different areas or business units. Drawing from this information, Management can quickly identify risks and the severity of any gaps in the control structure, they can priorities areas that need particular attention and evolve strategies to manage them.