In the course of its normal business, Triodos Bank runs operational risks. These risks relate to losses Triodos Bank could incur as a result of inadequate or failing internal processes, systems, human behaviour or external events. Triodos Bank limits these risks with clear policies, reports and procedures for all business processes.
The operational risk framework uses several tools and technologies to identify, measure, mitigate and monitor risks on an operational, tactical and strategic level. During 2015 the operational risk framework was brought further in line with the current scale and complexity of the organisation. Also the Product Approval Policy was revised and aligned with new legislation.
Operational Risk Management includes Information Security, Outsourcing and Business Continuity. Activities to manage risks related to these subjects are executed under the responsibility of the Chief Operating Officer in line with the operational risk framework.
The Non Financial Risk Committee and the Product Approval Committee, where all non financial risks aspects are discussed including compliance and IT risk, meet on a monthly basis. Numerous control measures have been improved and implemented in IT-systems and embedded in procedures and work instructions. Co-worker training and involvement supports these improvements because, as a learning organisation, people are key to successfully managing operational risks.
Triodos Bank applies a method based on the Basic Indicator Approach for the calculation of the minimum capital requirements for operational risk.
The operational risk framework follows the principles mentioned in the Sound Practices for the Management and Supervision of Operational Risk. These sound practices provide guidelines for the qualitative implementation of operational risk management and are advised by the Bank of International Settlements. During 2015 no material losses occurred within Triodos Bank as a result of operational risk related events.