Triodos Bank’s Executive Board provides a perspective on the wider world it operates in, its impact and activity in 2017 and its prospects for the future.
Operational 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, procedures and controls for all business processes. The operational risk framework uses several tools and technologies to identify, measure and monitor those risks and monitors the level of control on an operational, tactical and strategic level. During 2017 the operational risk tools further increased in use and were brought further in line with the current scale and complexity of the organisation.
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 where the non-financial risks aspects are discussed including compliance and IT risk, meets 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 to calculate 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 2017 no material losses occurred within Triodos Bank as a result of operational risk related events.