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Operational risk

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 behavior 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. The operational risk framework is developed under responsibility of the Chief Finance Officer. Special parts of Operational Risk Management are 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 overall operational risk framework.

A Non Financial Risk Committee, were all operational risk aspects are discussed together with compliance risk and reputation, is embedded.

Numerous control measures are implemented in IT-systems and embedded in procedures and work instructions. Co-worker training, level of experience and involvement all support this, because people are key to the success of managing risks.

The Basic Indicator Approach is used for the capital calculation of operational risk, in accordance with Basel II. The operational risk framework follows the principles mentioned in the Sound Practices for the Management and Supervision of Operational Risk. These sound practices give guidelines to the qualitative implementation of operational risk management and are advised by the Bank of International Settlements.

During 2013 no material losses occurred within Triodos Bank as a result of operational risk related events.