Service Group in Mexico
Operational risk is defined as the possibility of losses resulting from failure, deficiency or inadequacy of internal processes and controls, people and systems or from external events. This definition includes the legal risk associated with inadequate or deficient contracts signed by the institution, with penalties due to noncompliance with laws, and with compensation for third-party damages arising from activities carried out by the institution.
Operational Risk Management, as well as Market Risk Management, is an integrate part of Risk Management Unit.
Main functions of the Operational Risk Management include:
- Identified all relevant details of transactions, capture errors and potential risk process.
- Identifying training demands in relation to operational risk policies.
- Support areas of the firm, including the operational risk management of the entities.
- Coordinates the operational risk management practices for the various business areas and support areas
The established structure helps to identify, monitor, measure and report operational risks. The main responsibilities of the operational risk management group include formalization of incurred events, self-assessment of controls and the monitoring of key indicators. These processes are embedded in the local governance of J.P. Morgan, under the Control Committee and the Audit Committee, which ensure effective communication of the control events and their corrective actions by senior management of the firm. J.P. Morgan's control processes meet the requirements of Mexican regulators.