Some non-financial operational risks in investment banks include:
- Cybersecurity
- Ransomware
- Phishing
- Internal and external fraud
- Internal salespeople hiding errors or accounts
- Clients that may be engaged in fraudulent activity
- Almost 40% of mid-sized and large digital financial services organizations experienced an increase in fraud in 2020
- Third party risk
- Bank works with a lot of third parties (outsourcing database work or financial analysis, fintech, SaaS platforms etc.)
- Identify and evaluate risk
- Process errors
- Errors in fee calculations
- Accounting or data entry errors
- Business disruptions
- Vendor disagreement
- Reputational risk
- Inaccurate client records
- Missed deadlines (can lose clients)
- Loss of client assets through negligence (wealth management)