Top 9 Operational Risks That Organizations Should Consider

Jahida Azreen Mar 24 2023

Operational risk

Many organizations are striving hard to mitigate operational risks across their workplace. Operational risk is the possibility of harm or loss to a company's operations, processes, or assets as a result of internal factors, such as insufficient or ineffective internal processes, systems, or human errors, as well as external occurrences, like natural disasters, cyberattacks, or regulatory changes. Here, in this article, let's check out some instances of operational risks that businesses may experience:

Top 9 Operational Risks 

Human Error

  • One of the top operational risks is human errors. It includes employees' mistakes that can result in regulatory penalties, financial losses, or reputational damage.

Cybersecurity Threats

  • Due to the growing competitive digital world, one of the errors that organizations need to consider is cyber security threats. Mostly cyber attacks, data breaches, and other online security risks occur. These threats can expose sensitive data and harm reputation, resulting in financial losses.

Vendor and Third-party Risk

  • Vendor and third-party risks comprise risks raised by suppliers and vendors. It also includes risks from other third-party relationships, such as financial instability, data breaches, and reputational harm.

Technology Failure

  • Technology failure can harm your productivity in no time. Software errors, system breakdowns, or hardware malfunctions can affect business operations. These failures will lead to lost productivity or revenue.

Business Interruption

  • Unforeseen events, such as power outages, natural disasters, or public health emergencies, can impact operations. At times, various crises might interrupt the business and affect its performance. These instances will result in revenue loss.

Supply Chain Disruption

  • Natural disasters, political unrest, or other external causes can cause supply chain disruptions, which can cause production delays and financial losses.

Regulatory Compliance

  • As an organization, it is crucial to follow legal requirements. Fines, legal penalties, and social harm may result from breaking laws and rules. Organizations must prioritize regulatory compliance to ensure their company's long-term success because it is crucial to managing operational risk.  


  • Financial loss and reputational harm can come from internal and external fraud, such as embezzlement and phishing scams.

Environmental Risks

  • Events related to the environment, such as pollution or natural catastrophes, can affect business operations and cause financial damage.

Final Thoughts

Organizations should have a complete risk management framework for efficiently identifying, evaluating, and managing operational risks. Organizations can reduce the possibility of potential losses and guarantee business continuity by proactively addressing these risks. We hope you got to know some of the operational risks. Use the information above to increase your company's return on investment.