The Securities Institute is introducing an Advanced Certificate in Operational Risk qualification, the first of its kind in the UK.
As part of the programme the Institute, in association with Ernst and Young, is using a pre-published case study approach, which is new to the financial services industry.
The new Advanced Certificate in Operational Risk qualification has been introduced in response to requests from firms for an operational risk qualification which tests candidates' ability to apply their knowledge and understanding of operational risk to realistic scenarios.
The new Advanced Certificate in Operational Risk qualification is aimed at staff in operations, with at least 18 months experience, who have already achieved a Financial Services Authority threshold competency qualification, such as the Investment Administration Qualification (IAQ) or an equivalent back office qualification from another provider.
The first public sitting of the Advanced Operational Risk examination will be 10th December 2004, offered both in London and at regional UK venues including Edinburgh, Glasgow, Leeds, Birmingham and Manchester.
The examination will be three hours' duration and consist of three case studies, with candidates choosing two on which to answer questions. The examination entry fee is £150 which includes a copy of the book of case studies. Preparation for this examination is an estimated 60-90 hours of study.
The pre-published case study approach, where case studies are seen in advance, is an exciting and realistic approach to the learning and testing of knowledge, as the cases are based on real business issues which firms can encounter. The Securities Institute believes the approach adopted in the Advanced Certificate in Operational Risk qualification is unique and offers a modern approach to management training.
Simon Culhane, Chief Executive of the Securities Institute, said, " Risk is a big issue for the industry and our members wanted an advanced examination that tested candidates' ability to deal with the type of practical operational risk issues encountered in their firms. We have adopted an exciting and realistic approach to learning and testing of knowledge as the case studies are based on real business issues. We are delighted that Ernst and Young was able to provide us its professional expertise in the development of both the Advanced Operational Risk examination and the pre-published case studies.
"Staff who have an interest in the future of their firms will be well aware of the FSA's emphasis on firms having a strong risk-awareness culture. This qualification will help them understand the risks their firm could face and how best to eradicate or alleviate them. Staff who can demonstrate they are alert to the risks associated with a certain action are likely to be highly valued by a firm. Failure to recognise the importance of certain factors can be highly damaging to a business leading to reputational loss, financial loss and even closure."
The Securities Institute offers an Operational Risk unit as part of its Level 3 Investment Administration Qualification (IAQ). This tests candidates' knowledge and understanding of operational risk through a multiple choice examination. This IAQ unit is recognised on the Financial Services Skills Council Appropriate Examination list as a key 6 exam for certain overseeing activities.
The pilot paper for the new Advanced Operational Risk examination demonstrated that candidates had benefited from taking the Operational Risk unit from the IAQ programme. The examination fee for this unit is £75 and the work book £75. The next sitting for the IAQ Operational Risk unit is in November and with the Advanced Operational Risk examination sitting in December candidates could achieve the new Advanced Certificate in Operational Risk qualification early in 2005.
In addition to being a stand-alone qualification, the new Advanced Certificate in Operational Risk qualification is a key step on the path to another new award which the Institute is developing to recognise the specific skills required by senior operations staff, the Diploma in Investment Operations qualification. This pathway builds on the IAQ programme with the Advanced Operational Risk paper and then progresses to the Institute's current Diploma paper - Global Operations Management. Longer term, it is anticipated that further options will be offered at this level. This qualification will give operations staff the opportunity to achieve senior practitioner status by gaining a qualification on a par with those available to front office personnel. The first awards for the new Diploma in Investment Operations qualification will be made early in 2005.