existing extracts rationalised. IT-based control frameworks could also have a role to play. They can allow banks to identify the critical control points within their operational processes and can act as an early warning system to flag potential high risk situations for immediate follow-up. A standardised workflow should enable timely communication up and down the management chain but for this to work, people-based controls must run in conjunction with IT solutions. Staff should be trained to spot discrepancies and know the relevant reporting procedures. In this scenario, the central risk manager becomes, in the words of head of product development, Mike Bush, at specialist supplier, BCS, a ‘gamekeeper’. ‘Those institutions with decentralised
operational risk functions are at the forefront,’ he felt, and would also be less concerned about the regulators’ liquidity management proposals than their centralised counterparts.
