Operational Risk Management Examples and Strategies

Operational risk management examples often reveal how small internal breakdowns ripple into massive losses. When Delta Air Lines’ crew-tracking and scheduling systems crashed after a vendor software update in July 2024, over 800 flights were canceled, and costs soared past $500 million. That event wasn’t caused by a cyber-attack but by a routine update, proof that operational risks hide in plain sight. 

A month later, a U.S. bank briefly credited a customer’s account with $81 trillion due to a manual entry error before systems corrected it. These operational risk management examples show why leaders across finance, healthcare, and manufacturing now treat technology failures, human errors, and vendor issues as equal threats. 

In this blog, you explore operational risk management examples, essential strategies, major challenges, and modern approaches driving stronger operational control.

Key Takeaways

• Operational risks stem from everyday process failures; even minor internal errors can trigger large-scale financial and reputational losses.
• Integrated risk frameworks outperform reactive methods, offering visibility across compliance, vendors, and technology systems.
• Technology-driven approaches like AI, automation, and digital twins now enable predictive detection and faster incident response.
• VComply’s unified platform simplifies ORM by automating compliance, centralizing policies, managing risks, and resolving incidents efficiently.
• A proactive, technology-enabled ORM strategy enhances resilience, audit readiness, and executive decision-making across industries.

What Is Operational Risk Management (ORM)?

Millions of dollars vanish each year when internal processes misalign, even when external conditions seem stable. Operational risk management examples hide in silent breakdowns: a cloud provider’s automated patching tool fails overnight, and a healthcare system’s patient portal crashes, exposing sensitive records. Recent journals argue that data analytics must now underpin ORM to catch anomalies missed by legacy checks.

Here are its two primary dimensions.

Definition and Scope

Operational Risk Management is the structured process of identifying, assessing, and mitigating risks that arise from an organization’s internal operations, spanning people, processes, systems, and external dependencies. It differs from strategic or market risk, which focuses on external shifts or financial variables such as competitor moves or macroeconomics.

Why Operational Risks Are Increasing

Operational risks rise faster now than ever before, owing to rapid tech adoption and complex vendor ecosystems. Healthcare systems faced downtime when a third-party EHR vendor failed scalability tests in 2025, blocking access to patient records. 

Meanwhile, manufacturing plants saw supply chain software outages ripple through operations for days. Below are key reasons operational risks are increasing:

• Third-Party Dependency Growth: Organizations now rely on dozens to hundreds of vendors, making operational environments more complex and interdependent. As vendor ecosystems expand, third-party failures and data breaches have become major sources of operational disruption.
• Cyber Threats & System Vulnerabilities: Outdated software patches remain a blind spot. Studies in 2025 show that 32% of cyberattacks exploit unpatched systems.
• Digital Transformation Complexity: Integration of AI, cloud, and IoT amplifies risk surface. New models of insider threat detection with adaptive scoring are emerging in 2025 research.
• Regulatory Pressure & Oversight Expansion: Regulators working in 2025 have shifted focus to vendor risk and operational resilience, requiring continuous monitoring and auditability across systems.

Also Read: How to Minimize Risks in Your Business

Understanding the foundation of ORM sets the stage for recognizing the various types of operational risks that organizations face daily.

What Are the Common Types of Operational Risks?

Operational failures now crop up when least expected, and risk leaders must stay alert. A 2025 report warns that global operational technology (OT) cyber incidents could expose firms to losses nearing $329.5 billion annually. Systems once thought “internal” are now highways for external threats and control gaps. Recent analyses show that 2025’s top operational risks include cybersecurity, workforce instability, and third-party failures.

Below are common risk types organizations encounter:

People-Related Risks

Operational risk management examples across sectors confirm that the human element remains the most persistent threat to organizational resilience. The 2025 Verizon Data Breach Investigations Report (DBIR) revealed that 60% of breaches involved human actions, including mistakes, credential misuse, or malicious intent. 

This pattern appears consistently across banking, healthcare, and industrial sectors, where a single oversight or insider misstep can trigger major compliance and financial consequences. 

Below are key categories of people-related risks observed globally:

• Human Error and Mistakes: Routine oversights, such as misconfigured systems or incorrect data inputs, often serve as the root cause of larger operational failures. The IBM 2025 Cost of a Data Breach Report highlighted that the average breach cost in India reached INR 220 million, with phishing and manual missteps among the top contributing factors. 
• Insider Misconduct or Fraud: Internal actors abusing authorized access continue to drive operational losses. A 2025 U.S. Financial Crimes Enforcement Network (FinCEN) briefing highlighted a rise in internal fraud cases within mid-sized banks, where employees manipulated reporting data to conceal small thefts that later ballooned into multimillion-dollar losses.
• Skill Gaps And Poor Training: As organizations deploy AI-driven and automated tools, inadequate digital literacy amplifies risk. The World Economic Forum’s Future of Jobs Report 2025 notes that 44% of workers need reskilling to handle evolving digital compliance and risk technologies.
• Credential Misuse and Access Abuse: Stolen or misused credentials remain the fastest-growing vector of operational disruption. ITPro (2025) reported a 160% surge in credential theft compared with 2023, with healthcare and finance experiencing the sharpest rise.

Process Risks

Operational workflows now intersect digital systems, supply chains, and compliance mandates in ways few expected a decade ago. A 2025 Sphera report flags process breakdowns, like missing risk controls or weak handoffs, as a top operational challenge for industries such as manufacturing and energy. 

Below are key process risk types organizations contend with:

• Inconsistent Procedures and Deviations: When processes differ across departments or regions, even small inconsistencies can lead to compliance gaps and control failures. Standardizing workflows, documenting exceptions, and auditing adherence are crucial to maintaining operational discipline.
• Missing or Weak Control Checks: Automated systems improve speed but can also bypass necessary validations. Embedding control logic, such as maker-checker reviews, data validation, and reconciliation layers, helps prevent financial leakages and integrity issues before they escalate.
• Poor Change Management: Uncoordinated software or process updates often trigger service interruptions and data discrepancies. A structured change management protocol, including cross-functional testing and rollback plans, minimizes disruption and preserves data accuracy.
• Bottlenecks and Workflow Backlogs: Manual or poorly integrated workflows create choke points that delay decisions, increase error rates, and weaken customer trust. Automating repetitive approvals and using performance metrics to identify process lags improves both efficiency and control.

Process Risks

Operational workflows now intersect digital systems, supply chains, and compliance mandates in ways few expected a decade ago. A 2025 Sphera report flags process breakdowns, like missing risk controls or weak handoffs, as a top operational challenge for industries such as manufacturing and energy. 

Below are key process risk types organizations contend with:

• Inconsistent Procedures and Deviations: When processes differ across departments or regions, even small inconsistencies can lead to compliance gaps and control failures. Standardizing workflows, documenting exceptions, and auditing adherence are crucial to maintaining operational discipline.
• Missing or Weak Control Checks: Automated systems improve speed but can also bypass necessary validations. Embedding control logic, such as maker-checker reviews, data validation, and reconciliation layers, helps prevent financial leakages and integrity issues before they escalate.
• Poor Change Management: Uncoordinated software or process updates often trigger service interruptions and data discrepancies. A structured change management protocol, including cross-functional testing and rollback plans, minimizes disruption and preserves data accuracy.
• Bottlenecks and Workflow Backlogs: Manual or poorly integrated workflows create choke points that delay decisions, increase error rates, and weaken customer trust. Automating repetitive approvals and using performance metrics to identify process lags improves both efficiency and control.

Building visibility into these risks requires unified tracking and collaboration. With VComply’s RiskOps, teams can centralize risk ownership, streamline assessments, and monitor mitigation progress in real time, strengthening operational resilience across every process.

Technology And Systems Risks

Technology and systems errors are increasingly the fault lines behind massive operational failures, particularly for technical leaders overseeing compliance, risk, and infrastructure systems. 

A 2025 study showed that institutions relying on third-party service providers saw contagion effects in operational breakdowns after cyberattacks, with payment flows disrupted across entire banking networks.

Below are common types of technology and systems risks:

• System Failures and Outages: Core platforms crash or corrupt data. For example, Barclays experienced a three-day banking outage tied to a mainframe failure, blocking customer access and accruing compensation liability.
• Software Bugs and Configuration Errors: Updates or patches introduce new faults. A software update in a payment system may disable audit checks, letting erroneous transactions process unchecked.
• Third-Party Service Provider Disruptions: Dependency on external systems can cause ripple failures. A disruption at a payment service provider echoed across connected banks, degrading liquidity flows.
• AI / ML Model Failures or Drift: Advanced models may misjudge real-world data. The CORTEX framework (2025) highlights emergent AI risk modes, model drift, adversarial input, and traceability failures that become operational hazards when deployed. 

External And Environmental Risks

External events and environmental forces now pose serious threats to internal operations. A half-year report for 2025 showed natural disasters alone caused USD 131 billion in global losses, with over 80% of those tied directly to weather events. Companies that lacked contingency planning froze operations under floodwaters or during heatwaves. 

Below are the main external and environmental risk types confronting organizations:

• Natural Disasters And Climate Events: Floods, wildfires, storms, and extreme heat can disrupt supply chains or damage facilities. For example, California wildfires in early 2025 forced several manufacturers to suspend production for days.
• Supply Chain Disruptions: Over 76% of European shippers reported supply chain interruptions in 2024. Delayed raw material delivery halted production in automotive and electronics plants across multiple regions.
• Geopolitical and Trade Risks: Sudden import/export bans, sanctions, or tariff hikes strain procurement. A 2025 study noted that 56% of companies faced supply shock from geopolitical tension.
• Regulatory Changes And Environmental Mandates: New carbon laws, emission mandates, or waste disposal rules may require rapid adjustments. Some energy firms were forced to retrofit plants mid-year to comply with stricter 2025 emissions caps.

Understanding these diverse risk categories is only the first step. To protect against escalating losses and compliance fallout, organizations must build a structured framework that identifies, assesses, and mitigates operational risks systematically.

What Are the Key Components of Effective Operational Risk Management?

Organizations that manage risk reactively face higher exposure to losses and regulatory penalties. The 2025 IT Risk & Compliance Benchmark Report revealed that 60% of companies handling risk ad hoc experienced a data breach in 2024, compared to only 41% of those using integrated and automated GRC tools.

Below are the key components that define an effective operational risk management framework.

Risk Identification

Operational risk arises when hidden problems lurk within day-to-day systems. A recent WEF Global Risks Report 2025 flagged that operational disruptions, from supplier breakdowns to internal control gaps, rank among the top emerging threats to stability. Without systematic identification, these hidden fault lines multiply unnoticed. 

Below are essential techniques for spotting operational risks early:

• Risk Workshops and Brainstorming Sessions: Cross-functional teams map potential failures across processes. For example, a logistics firm’s quarterly workshop revealed unmonitored vendor IT dependencies in its supply chain network.
• Process Mapping and Flow Analysis: Visual diagrams expose weak links. A bank’s process map once revealed that check approvals bypassed fraud filters under peak load conditions.
• Risk Registers and Taxonomies: Standardized logs create consistency in risk naming and tracking. Many organizations now maintain risk registers as living documents across departments.
• Environmental Scanning & External Signal Monitoring: Real-time monitoring of regulatory announcements, third-party failures, and platform threats helps capture risks that internal teams may overlook.
• Data & Anomaly Detection Techniques: Automated tools flag outliers, such as sudden spikes in transactions or access events, that signal hidden operational risk before a breakdown. 

Risk Assessment And Prioritization

Effective prioritization means distinguishing risks that demand urgent action from those that can wait. The 2025 NIST Interagency Report underscores that Business Impact Analysis (BIA) should inform which assets and processes deserve top priority during assessment. Structured decisions reduce firefighting and support strategic resource allocation.

Below are proven methods for strong risk assessment and prioritization:

• Likelihood vs. Impact Scoring: Organizations assign probability and consequence levels to each risk. For instance, a healthcare provider may rate a potential data breach as both highly likely and severely impactful, while a temporary printer malfunction receives a lower score.
• Criticality Classification of Assets: Firms categorize assets based on their role in sustaining operations. A manufacturing company often ranks production control systems higher than administrative tools because even brief downtime can halt an entire assembly line.
• Risk Appetite and Tolerance Setting: Defining acceptable risk levels ensures strategic focus. A financial institution may have minimal tolerance for compliance failures but greater flexibility toward minor process delays.
• Heat Map and Risk Matrix Visualization: Risk teams use visual grids to interpret data more clearly. A financial firm might identify transaction verification gaps as high-impact, moderate-likelihood risks requiring prompt mitigation.
• Scenario Analysis and Stress Testing: Simulating disruptions reveals compounding effects. For example, testing the simultaneous failure of a cloud provider and a payment processor helps banks prioritize investments in redundancy and response planning.

Risk Control And Mitigation

Operational risk control and mitigation convert identified risks into manageable actions. A Global Assessment Report 2025 noted that targeted investments in risk mitigation have reduced disaster losses even in high-hazard zones. This proves that structured responses can actively reduce impact.

Below are key mitigation strategies adopted across industries:

• Control Implementation and Process Hardening: Strengthening validation layers within workflows prevents repeat errors. For instance, a financial institution introduced dual-approval systems for high-value transfers after audit analytics revealed recurring posting discrepancies.
• Redundancy and Backup Continuity Plans: Deploying mirrored systems ensures business continuity. A hospital network maintained a live backup of its electronic medical record system, allowing zero downtime when primary servers were compromised during a 2025 regional outage.
• Risk Transfer Through Insurance And Vendor Contracts: Transferring specific exposures through insurance or service-level agreements protects against catastrophic loss. Manufacturers increasingly negotiate clauses that assign partial liability to vendors responsible for digital or supply-chain interruptions.
• Policy Updates and Automated Rule Enforcement: Embedding regulatory updates directly into operational workflows prevents compliance lag. A telecom provider’s automated rule engine blocked outdated data-retention protocols hours after a new data law took effect.
• Predictive Maintenance and Smart Monitoring: Predictive maintenance technologies have become a cornerstone of industrial risk control. Research published in Manufacturing Today 2025 found that AI-based systems reduced unplanned downtime by up to 50% and lowered maintenance costs by 25% across large manufacturing sites.
• Behavioral Controls and Training Reinforcement: Human oversight remains a critical defense. Organizations conducting monthly micro-training tied to access privileges have seen measurable declines in policy violations and insider-error incidents.

Struggling to keep up with constant regulatory updates and manual audits? Automate your compliance lifecycle with VComply’s ComplianceOps, a unified tool that centralizes frameworks, controls, and real-time alerts. Stay ahead of regulatory changes with over 2,000 pre-mapped global compliance frameworks built right into the platform.

Monitoring And Reporting

Monitoring and reporting transform operational risk management from a static checklist into a continuous improvement process. The PwC Global Compliance Survey 2025 found that 53% of organizations believe technology enables faster identification and proactive response to compliance issues. This insight reinforces that real-time visibility and data-backed reporting are no longer optional.

Below are proven approaches organizations use to strengthen oversight and reporting accuracy:

• Continuous Monitoring Dashboards: Real-time dashboards unify compliance, IT, and vendor data. A global bank used centralized dashboards to monitor high-risk transaction anomalies and supplier KPIs simultaneously, identifying discrepancies weeks before audit cycles began.
• Automated Alerts and Key Risk Indicators (KRIs): Configurable KRIs provide instant alerts when thresholds are breached. A healthcare network deployed automated KRI alerts to flag unauthorized access in patient databases, reducing data exposure incidents.
• Regulatory Reporting Alignment: Automated reporting tools now integrate risk data with evolving frameworks like ISO 31000 and HIPAA. Financial institutions use these tools to maintain real-time compliance evidence for regulators and internal audit committees.
• Executive-Level Visualization And Decision Dashboards: AI-driven visual analytics turn complex risk data into executive insights. An energy enterprise applied predictive visualization to its safety systems, enabling leadership to cut incident response time.

Still relying on emails or spreadsheets to manage incidents and investigations? Simplify case intake, tracking, and resolution with VComply’s CaseOps, designed for end-to-end incident management. Achieve 100% traceability from report to resolution with built-in evidence management and automated escalation workflows.

Once the essential components of operational risk management are established, the next step is addressing the challenges that often hinder their success and exploring proven ways to overcome them.

Operational Risk Management – Key Challenges and Proven Mitigation Strategies

Operational risk management examples from 2025 reveal that many organizations still struggle to align risk insights, automate compliance, and maintain visibility across complex systems. 

The World Economic Forum’s Global Risks Report 2025 ranked cyber incidents, data fragmentation, and critical infrastructure failure among the top global business threats. Addressing these challenges requires an integrated, analytics-driven framework. 

Below are the most critical challenges and the proven strategies that resolve them:

• Fragmented Risk Visibility Across Departments
  • Challenge: Disconnected data silos lead to delays in response and inaccurate risk assessments.
  • Mitigation Strategy: Implement a unified GRC (governance, risk, compliance) platform with dashboards that aggregate audit, compliance, and operational data to give leadership a single pane of glass.
• Manual and Reactive Processes
  • Challenge:  Reliance on spreadsheets and ad hoc tracking slows down assessments and increases human error.
  • Mitigation Strategy: Automate recurring workflows and compliance reporting. In PwC’s Global Compliance Survey 2025, 49% of respondents reported using technology for 11 or more compliance activities.
• Complex and Evolving Regulations
  • Challenge:  Rapid changes across ESG, cybersecurity, and data privacy frameworks stretch compliance teams thin.
  • Mitigation Strategy: Adopt tools that intelligently monitor regulatory changes and automatically surface relevant policy updates, helping you adapt internal controls more efficiently.
• Limited Management Buy-In and Budget Support
  • Challenge:  Risk programs often struggle to secure leadership support without a clear ROI or performance linkage.
  • Mitigation Strategy: Connect operational risk metrics to business outcomes (e.g., cost mitigation, reputational impact, or revenue protection). Use storytelling and scenario analysis to present the value of proactive risk management.
• Third-Party and Vendor Risks
  • Challenge:  Vendor breaches or supply chain disruptions increasingly propagate into your operations.
  • Mitigation Strategy: Enable real-time vendor performance monitoring and automated scoring. IBM highlights that vendor and supply chain breaches rank among the costliest attack vectors, often second only to phishing. 
• Shortage of Skilled Risk Analysts
  • Challenge:  Many organizations lack sufficient talent with deep risk analytics, making scaling difficult.
  • Mitigation Strategy: Use simulation-based training, bring in AI-assisted analytics tools, and upskill existing staff. Promote continuous education and cross-functional risk rotations to bridge capability gaps.

Also Read: Challenges of Siloed Risk Management and How to Fix Them 

After identifying the key challenges and mitigation strategies, it’s crucial to explore how modern technology amplifies these efforts and transforms operational risk management into a smarter, data-driven function.

How VComply Helps In Operational Risk Management

Modern organizations face expanding compliance mandates, fragmented controls, and higher accountability expectations. VComply’s integrated GRC platform addresses these challenges by unifying risk, compliance, policy, and incident data under one roof. Each module is purpose-built to close a key operational risk gap and streamline oversight across departments.

Below are the core capabilities that make VComply an essential enabler of operational resilience:

• Compliance Ops – Real-Time Regulatory Control

Automates compliance tracking, testing, and reporting. Companies can map controls to standards like ISO 27001, HIPAA, and SOX, assign owners, and set automated evidence collection. This reduces manual checklists and audit preparation time, helping compliance teams maintain accuracy even when frameworks evolve rapidly.

• Risk Ops – Integrated Risk Identification and Assessment

Centralizes enterprise-wide risk registers, KRIs, and heatmaps to monitor operational exposures in real time. Teams can quantify likelihood and impact, link risks to mitigation tasks, and track remediation progress. This proactive view lets leaders act before incidents escalate into losses.

• Policy Ops – Centralized Governance and Policy Automation

Provides a single repository for creating, reviewing, and distributing corporate policies. Automated version control and acknowledgment tracking ensure employees always access the latest guidance. Industries with strict mandates, like healthcare and finance, use this to maintain consistent governance and eliminate policy drift.

• Case Ops – Incident and Root Cause Management

Enables quick capture, triage, and investigation of incidents across functions. Real-time dashboards track resolution metrics, corrective actions, and lessons learned. This capability helps organizations convert each incident into measurable improvement while maintaining an auditable trail for regulators and auditors.

Finding it difficult to assess and prioritize operational risks in time? Empower your team with VComply’s RiskOps, enabling real-time risk assessment, scoring, and automated reporting. Reduce incident response time by up to 50% with dynamic risk registers and instant escalation alerts.

With its unified platform and purpose-built modules, VComply demonstrates how operational risk management can move from reactive oversight to proactive governance, leading naturally to the broader takeaways below.

Conclusion

Effective operational risk management examples are crucial for organizations to navigate evolving threats, prevent disruptions, and maintain control over critical operations. By implementing structured strategies, you can identify emerging risks, strengthen processes, and ensure accountability across teams, improving both efficiency and resilience.

Organizations that integrate operational risk management with the right technology can reduce manual effort, minimize errors, and respond proactively to challenges. Start your free trial with VComply today and experience how our platform centralizes compliance programs, automates risk assessments, simplifies policy management, and tracks incidents, all in one intuitive solution.

Discover how VComply can help your organization transform operational risk management into a seamless, proactive process while enhancing visibility, control, and informed decision-making.

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