To complete the FINANWARE™ suite specialized in integrated risk management in financial institutions, based on the Basel II recommendations and using the best market practices, we now make available to the Financial sector our new module to support Operational Risk management.

The functionality of FINANWARE™ Operational Risk provides the practical and effective use of suggestions to implement the Advanced Measurement Method (AMA), as recommended in the Basel Capital agreement for the identification, documentation and monitoring of the Operational Risk factors inherent to the business management of Financial Institution, and to quantify losses owing to such factors, generate alerts and monitor the implementation of operational risk mitigation policies.

After the Financial Institution has carried out a study, documentation and analysis of its processes and procedures to identify operational risk factors, the structure of the FINANWARE™ Operational Risk module allows the design and creation of a Risk Events Data Base able to record all the risk events associated with the business processes It provides the related technological and security components, in an extremely flexible manner, for the generation of the macro process - process - risk - event associated structure for the different types of data which are relevant and necessary for the analysis that each event has to record, and also integrates the results of the risk measurement and quantification processes generated by the system. The Risk Events Data Base is designed to record and store historical information, either risk events occurring in the institution or external information, when it becomes available.

For an Event Data Base that is accurately parameterized and fed into the institutional information, FINANWARE™ Operational Risk offers a complete and flexible set of "calculation engines" specifically designed for the application of the different Operational Risk quantification techniques and methodologies, the most important of which are: the VaR (Value at Risk) methodology and the calculations of loss due to physical and information failure definitions and of implementation failures in the Business Continuity Plan (BCP) specified under the ISO 17799 standards, such as the calculation of the Annualized Loss Expectancy (ALE) based on the equity value; the Single Loss Expectancy (SLE), the Exposure Factor (EF),and the Annualized Rate of Occurrence (ARO). The calculated loss data are stored together with the risk events information in the Risk events Data Base.

To facilitate the control and monitoring of the complex processes involving operational risk, FINANWARE™ Operational Risk comprises facilities to record and monitor the risk map of financial institutions and a practical and effective arrangement to generate Key Risk Indicators (KRIs) enabling the determination of the acceptable, marginal and high levels of operational risk factors to be assessed in the institution.