One of the biggest problems South African banks are experiencing when managing operational risk is the lack of a single definition for operational risk. Operational risk can take many forms; for example computer system failure, the malfunction of an ATM or in same instances the long queues at a bank can be an operational risk It is clear that banks lack sufficient information to distinguish between different operational risk events as well as other risk events like credit risk, market risk, etc. In other words, banks are experiencing great difficulties with the identification of operational risk in South Africa The study therefore aims to determine and construct a single definition of operational risk that will be sufficient for the assessment of operational risk management in South Africa. The study also aims to examine the existing as well as the possible methods to identify, quantify and measure operational risk The main goal of this study is therefore to investigate the feasibility of capital provisions as a way of managing operational risk in South African banks, in other words the viability of the New Basel Capital Accord on South African banks. The methodology used includes a literature review, in-depth interviews and a case study on South African Retail Bank to determine and evaluate some of the most renowned indicators of operational risk in South Africa. The first objective was to determine a single definition of operational risk in South Africa. As mentioned, South African banks are having great difficulties to find a single definition of operational risk and this is causing problems in identifying operational risks in South Africa. It is the view of this study that the Basel Committee's definition is not sufficient enough for operational risk management in South Africa; therefore there is a great need to find a single definition of operational risk in South African banks. The second objective is to provide an overview of the Base1 Committee and its Capital Accord, by focusing on one of the outstanding changes to the existing accord, which is the proposed explicit capital requirement for operational risk. It has been established that the Base1 Capital Accord is widely adopted around the world. Consequently, from the viewpoint of being competitive, it is to the advantage of a bank to adhere to the prescriptions of the Base1 Capital Accord. However, to stay relevant, the Basel Capital Accord was due for a review. The Basel Committee released a proposal to replace the existing Basel Capital Accord with a more. risk sensitive framework. The new framework intends to improve safety and soundness in the financial system by placing more emphasis on banks' own internal control and management, the supervisory review process, and market discipline. The third objective of this research was to present the theory of asset and liability management (ALM) within the unifying theme of operational risk management. It was indicated that capital is used to absorb an operational risk loss. The Asset and Liability Committee (ALCO) is responsible for the strategic management of a bank's balance sheet, therefore also ALM, and as capital forms part of the banks balance sheet, it is also the responsibility of the ALCO to manage the capital that is used as provision for an operational risk. The fourth objective was to determine and evaluate the key risk indicators of operational risk in South Africa theoretically and then also by means of a case study on a South African Retail Bank and then to made some recommendations regarding the effective identification of the key indicators of operational risk in South Africa. It was indicated the challenge in identifying key operational risk indicators is to find indicators that is not only business-specific but are also fm wide indicators of operational risk. Recommendations on the effective identification of key operational risk indicators were made. / Thesis (M.Com. (Economics))--North-West University, Potchefstroom Campus, 2004.

One of the biggest problems South African banks are experiencing when managing operational risk is the lack of a single definition for operational risk. Operational risk can take many forms; for example computer system failure, the malfunction of an ATM or in same instances the long queues at a bank can be an operational risk It is clear that banks lack sufficient information to distinguish between different operational risk events as well as other risk events like credit risk, market risk, etc. In other words, banks are experiencing great difficulties with the identification of operational risk in South Africa The study therefore aims to determine and construct a single definition of operational risk that will be sufficient for the assessment of operational risk management in South Africa. The study also aims to examine the existing as well as the possible methods to identify, quantify and measure operational risk The main goal of this study is therefore to investigate the feasibility of capital provisions as a way of managing operational risk in South African banks, in other words the viability of the New Basel Capital Accord on South African banks. The methodology used includes a literature review, in-depth interviews and a case study on South African Retail Bank to determine and evaluate some of the most renowned indicators of operational risk in South Africa. The first objective was to determine a single definition of operational risk in South Africa. As mentioned, South African banks are having great difficulties to find a single definition of operational risk and this is causing problems in identifying operational risks in South Africa. It is the view of this study that the Basel Committee's definition is not sufficient enough for operational risk management in South Africa; therefore there is a great need to find a single definition of operational risk in South African banks. The second objective is to provide an overview of the Base1 Committee and its Capital Accord, by focusing on one of the outstanding changes to the existing accord, which is the proposed explicit capital requirement for operational risk. It has been established that the Base1 Capital Accord is widely adopted around the world. Consequently, from the viewpoint of being competitive, it is to the advantage of a bank to adhere to the prescriptions of the Base1 Capital Accord. However, to stay relevant, the Basel Capital Accord was due for a review. The Basel Committee released a proposal to replace the existing Basel Capital Accord with a more. risk sensitive framework. The new framework intends to improve safety and soundness in the financial system by placing more emphasis on banks' own internal control and management, the supervisory review process, and market discipline. The third objective of this research was to present the theory of asset and liability management (ALM) within the unifying theme of operational risk management. It was indicated that capital is used to absorb an operational risk loss. The Asset and Liability Committee (ALCO) is responsible for the strategic management of a bank's balance sheet, therefore also ALM, and as capital forms part of the banks balance sheet, it is also the responsibility of the ALCO to manage the capital that is used as provision for an operational risk. The fourth objective was to determine and evaluate the key risk indicators of operational risk in South Africa theoretically and then also by means of a case study on a South African Retail Bank and then to made some recommendations regarding the effective identification of the key indicators of operational risk in South Africa. It was indicated the challenge in identifying key operational risk indicators is to find indicators that is not only business-specific but are also fm wide indicators of operational risk. Recommendations on the effective identification of key operational risk indicators were made. / Thesis (M.Com. (Economics))--North-West University, Potchefstroom Campus, 2004.

In the last decade, the financial service industry has become increasingly aware of the dangers posed by operational risk. Profound changes in the economic and financial environment have made it necessary for banks in general to adapt their long term strategies as well as their approaches to the management of their assets and liabilities. Regardless of this heightened awareness, banks continue to fail at effective management of these risks. The Asset and Liability Management Committee (ALCO) is responsible for managing a bank's assets and liabilities to balance its many risk exposures and thereby help it achieve its operating objectives e.g. maximising Net Interest Income (Nil). Thus the ALCO process is the crux of the strategic management process performed within a bank. The ALCO process is driven by people, processes and technology which, in essence, is a broad definition of operational risk. Failure in any one of these areas will lead to failure of the ALCO, ALCO processes and, therefore, the strategic Asset and Liability Management (ALM). The focus of this study is, therefore, how to measure and manage operational risk in a bank's ALCO process. A case study was conducted, with the aid of ALCO experts in a specialised niche bank in South Africa, to identify operational risks within this bank's ALCO process. The various risk indicators of operational risk were classified into 5 broad categories. Each category was weighted according to its representative risk indicator and converted into percentages for the interpretation of the overall results. Category 2 (authority levels) has the highest negative impact, while the remaining 4 categories (employee, model, system and other indicators) have a medium negative impact, on the efficiency of the ALCO process. / Thesis (M.Com. (Risk Management))--North-West University, Potchefstroom Campus, 2009.

Globalisation of markets has brought about enormous challenges and opportunities for business organisations. The prevailing business environment propels organisations to improve and create value in order to remain competitive. Improvement and value creation begin internally and get reflected externally in the form of value added propositions to the market. Six Sigma is a methodology known for creating value within organisations, in all industries, through process improvement which translates into enormous savings for the organisation. Six Sigma is widely used globally and it has been in existence for many years, yet it is not so prevalent in the South African business environment. This research explores the principles and approach adopted, which distinguish the Six Sigma methodology from other improvement programs. In the manufacturing industry, operational efficiencies are essential to enhance value creation and profitability. The study begins by discussing the origin, history and evolvement of Six Sigma into a methodology recognisable and espoused by leading world class organisations. The technique used to effect Six Sigma is entrenched and enforced by adherence to stipulated basic principles, breakthrough strategy and Six Sigma tools in identification and elimination of variation. The study later models some of Six Sigma tools by application on the operational entity in verification and testing of theoretical knowledge into practical knowledge that can be exploited for process improvement consequently enhancing operational efficiencies. The impact of Six Sigma on operational efficiencies underlie on the ability to positively change process effectiveness and capability to near perfection as expressed by defect rate of not more than 3.4 defects per million opportunities. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2011.

In the last decade, the financial service industry has become increasingly aware of the dangers posed by operational risk. Profound changes in the economic and financial environment have made it necessary for banks in general to adapt their long term strategies as well as their approaches to the management of their assets and liabilities. Regardless of this heightened awareness, banks continue to fail at effective management of these risks. The Asset and Liability Management Committee (ALCO) is responsible for managing a bank's assets and liabilities to balance its many risk exposures and thereby help it achieve its operating objectives e.g. maximising Net Interest Income (Nil). Thus the ALCO process is the crux of the strategic management process performed within a bank. The ALCO process is driven by people, processes and technology which, in essence, is a broad definition of operational risk. Failure in any one of these areas will lead to failure of the ALCO, ALCO processes and, therefore, the strategic Asset and Liability Management (ALM). The focus of this study is, therefore, how to measure and manage operational risk in a bank's ALCO process. A case study was conducted, with the aid of ALCO experts in a specialised niche bank in South Africa, to identify operational risks within this bank's ALCO process. The various risk indicators of operational risk were classified into 5 broad categories. Each category was weighted according to its representative risk indicator and converted into percentages for the interpretation of the overall results. Category 2 (authority levels) has the highest negative impact, while the remaining 4 categories (employee, model, system and other indicators) have a medium negative impact, on the efficiency of the ALCO process. / Thesis (M.Com. (Risk Management))--North-West University, Potchefstroom Campus, 2009.

Globalisation of markets has brought about enormous challenges and opportunities for business organisations. The prevailing business environment propels organisations to improve and create value in order to remain competitive. Improvement and value creation begin internally and get reflected externally in the form of value added propositions to the market. Six Sigma is a methodology known for creating value within organisations, in all industries, through process improvement which translates into enormous savings for the organisation. Six Sigma is widely used globally and it has been in existence for many years, yet it is not so prevalent in the South African business environment. This research explores the principles and approach adopted, which distinguish the Six Sigma methodology from other improvement programs. In the manufacturing industry, operational efficiencies are essential to enhance value creation and profitability. The study begins by discussing the origin, history and evolvement of Six Sigma into a methodology recognisable and espoused by leading world class organisations. The technique used to effect Six Sigma is entrenched and enforced by adherence to stipulated basic principles, breakthrough strategy and Six Sigma tools in identification and elimination of variation. The study later models some of Six Sigma tools by application on the operational entity in verification and testing of theoretical knowledge into practical knowledge that can be exploited for process improvement consequently enhancing operational efficiencies. The impact of Six Sigma on operational efficiencies underlie on the ability to positively change process effectiveness and capability to near perfection as expressed by defect rate of not more than 3.4 defects per million opportunities. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2011.

Thesis (M.S. in Joint Campaign Planning and Strategy)--Joint Forces Staff College, Joint Advanced Warfighting School, 2005. / "31 May 2005." Electronic version of original print document. Includes bibliographical references (p. 65-66).

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