Operational risk management for banks is becoming more important every year and getting more crucial during times of instability. According to the research, most of the banks were not prepared for COVID-19-pandemic and had to review operational risk procedures immediately to secure their businesses in working from home environment. The War in Ukraine nowadays also influenced operational risk management in banks significantly. The aim of the paper is to understand the operational risk management challenges in banks during times of uncertainty, to highlight the operational risk management weaknesses when working remotely during pandemic or other unpredictable circumstances and to find out potential operational risk management solutions for banks. By gathering and analysing survey data from the finance sector's workforce and empirical evidence, the research is aimed to identify the gaps in managing operational risk in banks during times of instability, making the subject current and relevant. Factors influencing operational risk management form the basis of the qualitative method used in this study. The key findings and results are that banks must re-evaluate their business continuity planning strategies and reinforce their remote working policies, to adjust the controls that exist and enhance the processes that don't have any controls at all with the focus on transaction processing.

This study is devoted to operational risk management in banks. One of the factors are human errors. According to the different studies, banks face a lot of challenges in managing human errors and cultivating employee’s mindset. The aim of the paper is to identify the reasons and the frequencies of human errors in banks, to understand employees’ attitude towards mistakes and to discover the gaps in managing operational risk in banks. By collecting and analyzing the survey data from the finance sector’s employees globally and empirical evidence, the research is aimed to provide potential operational risk management solutions for banks, making the subject relevant. The qualitative method utilized in this study is based on factors influencing operational risk management. The key results are that employees’ attitude, knowledge, automation, fat finger error, process documentation, support from colleagues, and attentional issues have significant relationships with the reasons for human errors in banks and thus has the impact on operational risk management in banks. Also, the research provides deeper conclusions about the frecuencies of human errors, employees mindsets and management response towards the mistakes in banks.

The importance of operational risk management in the bank increases every year. Banks need to take actions to prevent fraudulent activities, minimize errors in transactions, automate processes and improve data security. Ignoring operational risk procedures or failure to implement suitable control mechanisms could lead to unexpected losses, unsatisfied customers, and potentially regulatory sanctions, all of which could seriously harm bank’s reputation in a highly competitive market. A specific focus is on payments and security transactions, as they are linked to the biggest risks. Any regulatory driven project failure or IT project failure in the bank, insufficient project governance, failed implementation of a new system or failure in external data sources can lead to even bigger losses. After a review of the Basel Framework and the new set of standards of the upcoming changes to take effect as of 2023, the aim of this article is to elucidate the changes related to operational risk capital in banks and to ascertain the weakest points in operational risk management. Therefore, this topic is timely relevant, as the aim of the research is to manifest the possible changes withing operational risk management in banks, by gathering and analysing empirical evidence. This article is based on academic research and professional experience. The methods used in the research are comparison, generalization and graphical illustration of statistical information, identification of the main idea of regulatory frameworks and legal documentation. The main results and findings of the research are that banks will need to rethink the strategies of their capital management and this article emphasizes the importance of a redesigned approach towards operational risk assessment in Basel III and substantiates the efficiency of the proposed framework. With Basel III, each loss may cause more challenges, as will be considered twice, as the direct impact on profit/loss and direct impact on future operational risk capital. Another finding is that the biggest amounts of losses are related to corporate items events and according to the static data taken from ORX membership community, top five monthly losses are far from normal distribution. Important finding was that most of the banks were not prepared for COVID-19-pandemic and had to review operational risk procedures immediately to secure their business in working from home environment, meaning that gap in operational risk management existed already before COVID-19-pandemic.