Chapter 2: Focus Areas

Question 1

What are the tools for analysing risk connectivity?

Answer 1

Causal Loop Diagrams
Bow-Tie Analysis
Network Analysis Software

Question 2

What does a heatmap do?

Answer 2

Combine likelihood and impact
Green/yellow/red

Question 3

What is a risk network?

Answer 3

Shows hows risks are interconnected
Each node is an individual risk
Lines connecting nodes are the interdependecies between them

Question 4

Can operation risks generate returns?

Answer 4

Operational risks can generate visible returns in the form of fee income and revenues from new products

Question 5

Risk Appetite vs Risk Tolerance

Answer 5

Risk Tolerance: Define acceptable levels of risk for different areas of the business.
Essentially transforms appetite into measurable forms

Question 6

What is typically included in impact scales?

Answer 6

Financial impact, regulatory impact, and reputation damage are all typically included in impact scales, while employee satisfaction is not listed as a standard dimension