The layered risk framework is a crucial approach in operational risk management, emphasizing multiple defense mechanisms to mitigate risks effectively.
This framework, often visualized as a series of defensive layers, ensures comprehensive coverage against potential operational failures, fraud, and external threats.
At the core of the layered risk framework is the idea of redundancy, where multiple safeguards operate simultaneously to provide a robust defense. The primary layers typically include:
Preventive Controls:
These are proactive measures designed to stop risks from occurring. Examples include employee training, strict access controls, and automated detection systems. By addressing risks before they materialize, preventive controls form the first line of defense.
Detective Controls:
These controls identify and report risks that have breached preventive measures. They involve monitoring systems, audits, and fraud detection software. Detective controls are crucial for timely identification of issues, allowing organizations to respond swiftly.
Corrective Controls:
Once a risk is detected, corrective controls come into play to mitigate the impact. This includes incident response plans, remediation procedures, and disaster
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