Process risk definition
Process risk. The risk of losses caused by insufficient, badly designed or poorly implemented processes and processing controls and unintentional human errors or omissions during normal (transaction) processing. • Outsourcing risk and third party risk: The risks stemming from problems regarding continuity, integrity and/or quality of the activities outsourced to or partnered with third parties (whether or not within a group) or from the equipment or staff made available by these third parties. In view of the digital transformation trends, a lot of attention is given to the mitigation of this increasing risk. • Model risk The risk of losses or potential for adverse consequences arising from decisions based on incorrect or misused model outputs and model reports. There is a distinction between model errors and wrong application of the model (e.g. use of outdated models).