Operational Risk Management for the Bank for Investment and Development of Vietnam

GBRW Consulting, GBRW Group, Operational Risk, Risk Management

The Bank for Investment and Development of Vietnam (BIDV) is one of the largest banks in the country with assets over US$ 20 billion focused on a portfolio of private and state-owned mid-cap and corporate enterprises.

BIDV wished to appoint consultants to assess the existing organisational model, functions and responsibilities of the ORM system. GBRW provided a team of experts in operational risk management, management information systems, and project management in order to achieve the Project objectives.
GBRW executed a comprehensive strategic and organisational review with a view to re-organising the Operational Risk department more efficiently. Secondly, we supported the department in building a system of Key Risk Indicators (KRIs). Crucially, these KRIs were linked to the Balanced Scorecard (BSC) methodology that GBRW was simultaneously implementing throughout the Bank in co-operation with the Strategy and Planning department. This required a thoughtful and creative approach to assimilating both quantitative and qualitative indicators.

These KRIs were also used as the foundation for building an approach for calculating the regulatory capital attributable to operational risk under the Basel II capital accord. Finally, we developed an extensive User Requirements Document (URD) to underpin the procurement process for operational risk management software. During the entire assignment, extensive training was provided, both classroom as well as on-the-job.

Deliverables included:

- Innovative changes needed to improve ORM capacity;

- A system of key Operational Risk Indicators in accordance with international practice;

- Proposals for setting up User Requirements Document to develop software instruments for supporting ORM;

- Instructions on calculation of capital for operational risks, provisioning for operational risks and implementation; and

- Developed project plan for the ORM department.