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Find and briefly describe four public
examples of OpRisk which have occurred
over the last three (3) years. Refer to the
Basel definition to justify why the identified
example is an Operational Risk event.

As part of the revised Basel framework,1 the Basel Committee on Banking Supervision set forth the following definition: Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events.

Examples of Operational Risk

Santander UK sends wrong payments totaling $175 million

On Christmas Day 2021 the Santander UK bank paid about 75,000 people mistaken payments. Clients that received these payments did not only include customers of the bank but also of rival banks. What occurred during this event was that the bank duplicated about 2,000 payments that have been originally been processed by commercial and corporate customers to third parties. Santander produced a statement that the funds for the duplicate payments were not withdrawn from the originators accounts and as a result caused an overdraft.

This can be considered an example of operational risk because it deals with a loss resulting from a failed internal system, process, or people. In the case of Santander UK Bank they had an issue with their internal system that led their computers to double post these payments and as a result lost millions of dollars that they are trying to recuperate currently.

https://www.nytimes.com/2022/01/01/business/santander-bank-extra-payments.html
https://www.cnbc.com/2021/12/31/santander-accidentally-put-millions-into-random-accounts-on-christmas-day.html

Colonial Pipeline ransomware attack

On May 7th 2021 the Colonial Pipeline control room received a ransom note requiring them to pay in cryptocurrency before 5AM. Even though the company didn’t know it, the ransomware attack had actually begun on April 29th when hackers had gained access to a virtual private network account, which was no longer in use, and therefore accessed the company’s computer network. As a result of this attack, Colonial Pipeline had to shut down service until May 12th. The attack on the company led to fuel shortages all along the East Coast and increased fuel prices for consumers.

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