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External Partners Alumni Search Submit Return to home Search Search About About Olin Home Why Olin Equity, Diversity & Inclusion Leadership & Strategy News & Media Events Contact Us Programs Programs Home Explore Our Programs BS in Business Administration MBAs Specialized Master's Doctoral Executive Education Dual Degrees Faculty & Research Faculty & Research Home Faculty Directory Research Research Centers Olin Brookings Commission Olin Award Student Resources Student Resources Home Career Services Center for Experiential Learning Entrepreneurship Academic Calendars Student Organizations For Current Students For Military Veterans Admissions Admissions Home Scholarships & Aid Attend Program Events Visit Olin Ask a Student Student Profiles Request Information Refer a Candidate External Partners Alumni Operational risk management in financial services August 4, 2017 By WashU Olin Business School 2 minute read Home News Operational risk management in financial services Operational risk can have a crippling effect on a company if not managed properly.&＃160;This is especially true in the financial services industry.&＃160;Banks and investment firms must pay close attention to variables that have the potential to impact their operations, not only from the breakdown of technology and processes, but also from a personnel perspective.&＃160;The responsibility of managing one&＃8217;s money is great, and the inability to properly anticipate and manage potential risk factors can have a devastating effect, all the way up to the industry level.&＃160;A case in point was the subprime mortgage crisis of the late 2000s, which led to a nationwide economic recession. Mike Pinedo, the Julius Schlesinger Professor of Operations Management at New York University&＃8217;s Stern School of Business, is an expert in risk management research, particularly in the context of the financial services industry.&＃160;In his presentation at The Boeing Center&＃8217;s 13th annual Meir Rosenblatt Memorial Lecture, he described the main types of primary risks in a financial services company:&＃160;market risk, credit risk, and operational risk.&＃160;Ops risk, which is the risk of a loss resulting from inadequate or failed internal processes, people, or external events, may be the most important factor, he claimed. Pinedo goes on to describe various types of operational costs such as human resources, I.T. investments, and insurance costs, and how they impact corporate risk management.&＃160;For example, rogue traders can pose a risk if they make inadvisable decisions, so some investment firms choose to take out insurance against that possibility.&＃160;Other types of ops risk include transaction errors, loss of or damage to assets, theft, and fraud, all of which can pose a catastrophic risk at the industry level.&＃160;Pinedo adeptly inserted anecdotes into his lecture to provide examples of these risk factors playing out in the real world. The annual Meir J. Rosenblatt Memorial Lecture brings the &＃8220;rock stars&＃8221; of supply chain and operations to the Danforth Campus every fall. Each lecture gives prominent thinkers and practitioners alike the opportunity to hear an expert in the field highlight emerging trends. This lecture series was established in 2003 to honor the memory of Meir J. Rosenblatt, who taught from 1987 to 2001 at Olin Business School as the Myron Northrop Distinguished Professor of Operations and Manufacturing Management. A leader among faculty, Rosenblatt often won the Teacher of the Year award at Olin and authored the book &＃8220;Five Times and Still Kicking: A Life with Cancer,&＃8221; having battled cancer multiple times throughout his life. Operational Risk Management in Financial Services Mike Pinedo describes the main types of primary risks in a financial services company: market risk, credit risk, and operational risk. Play video About the Author WashU Olin Business School Firmly established at the Gateway to the West, Olin Business School at Washington University in St. Louis stands as the gateway to something far grander in scale. The education we deliver prepares our students to thoughtfully make difficult decisions—the kind that can change the world. Contact Us For assistance in finding faculty experts, please contact Washington University Public Affairs. Monday&＃8211;Friday, 8:30 to 5 p.m. Sara Savat, Senior News Director, Business and Social [email protected] &＃160; Kurt Greenbaum,Communications [email protected] Twitter: WUSTLnews Share article Apply Now Visit Us Request Info One Brookings Drive, St. Louis, MO 63130-4899 [email protected] 314-935-7301 News & Media Events Faculty Directory WashU Center for Career Engagement Washington University home Olin Links Sitemap Privacy Policies Title IX Accessibility ©2024 Washington University in St. Louis