Loss Event Management refers to managing the unforeseen loss of data or information caused by both internal system exposure and external events that may lead to a significant financial impact on an organization. In order to avoid this consequence an organization must be able to document, analyze and track internal and external operational events, register and link them to any area of the business.

Loss event information needs to be configured to capture all pertinent data to support root cause analysis and provide consistent data for regulatory and economic capital modeling and compliance. In addition, were necessary, the information gathered needs to be viewed through a workflow process depending on conditional values, such as the size of the loss. Embedding financial reporting operational risk frameworks will also help to understand the causes of these losses, their associated risks and the potential impact on the organization.

An occurrence of data loss can be called a Data Loss Event, with one of several possible root causes. Data loss must be distinguished from data unavailability, such as may arise from a network outage. Although the two have similar short-term effects for end users, data unavailability is temporary while data loss is permanent. Backup and recovery schemes are developed to restore lost data.

Limitations of Current Practices

• Loss Event Management systems often fall short of requirements for the following reasons:
• Manual processes make it difficult to report and track losses throughout an organization, and the resulting information is not always accurate or consistent.
• Information may have also been drawn up through different departments through separate reporting methods in order to satisfy different internal standards.
• The lack of an integrated view may complicate or prevent the identification of the root cause of the data loss.
• Financial reporting is not integrated into operational risk frameworks

How Modulo Risk Manager can help your business mitigate data loss:

• Consistent capture of loss events and near misses: includes multiple impacts and recoveries per loss event so that all incidents associated with a single loss can be captured in one place
• Documents loss events, root cause analyses, related risks, recovery procedures and responses
• Ensures consistency of loss and recovery data across your organization by aggregating information within Modulo Risk Manager
• Allocates events to multiple organizations or legal entities at the aggregate loss event or individual impact level
• Captures the loss event description, indirect or direct loss impact category, Basel II category, loss detection source and control factors. Also monitors projected risk exposure amounts as well as actual loss amounts and any funds that were recovered upon resolution
• Issue identification and remediation: automated root cause analysis through workflow. Modulo Risk Manager captures causal data and tracking remediation efforts, reducing the number of events and minimizing their impact to the organization
• Decision support in the form of a detailed executive dashboard: reporting can aggregate loss data by event category, business lines and other dimensions, as well as compare actual loss to projected risk exposures
• Loss events and incidents can be registered consistently and with data integrity assurance, linked directly to the risks that materialized the controls that failed and/or the processes that broke down