There are several ways that businesses and investors can effectively manage operational risk:
1. Conduct regular risk assessments: Regularly assess potential risks that may arise from various operational activities to identify and prioritize areas that need to be addressed.
2. Implement risk management strategies: Put in place risk management strategies to mitigate, transfer or accept risks that cannot be eliminated.
3. Establish a risk management culture: Develop a culture that places a high value on risk management to improve productivity, profitability and business longevity.
4. Monitor and review risk management effectiveness: Monitor and review the effectiveness of implemented risk management strategies, to know if the implemented strategies are working, or any further measures need to be taken.
5. Invest in technology: Invest in effective technology and data analytics to identify potential risks and respond quickly and effectively to any risk post occurrence.
6. Train and Educate Staff: Educate team members properly on potential risks and their responsibilities in identifying, assessing, and managing risks, to ensure the whole team is up to speed.
7. Stay updated on evolving risks: Stay updated on new operational risks arising from current geopolitical, social, technological, and economic changes.
