OPERATIONAL RISK

MANAGER CERTIFICATE
CANDIDATE GUIDEBOOK
The Industry Standard for Operational Risk Practitioners
 EXECUTIVE SUMMARY
PRMIAs Operational Risk Manager Certificate is designed
to deliver a deep, practical understanding of operational
risk management frameworks and measurement
methodologies in financial institutions. Successful
candidates will be better prepared to implement
meaningful risk assessment initiatives, produce useful risk
management information and understand basic modeling
techniques for operational risk measurement.

The Operational Risk exam consists of 60 questions. The

syllabus is based on the PRMIA Operational Risk Manager
Certificate Handbook, together with PRMIA Case Studies
which are freely available on the PRMIA website.

Registration for the exam is via the PRMIA website and

taking the exam is designed to suit the needs of the busy risk professional. Be sure to read this
entire document to view important information that will help you to be a successful candidate.

We hope that you will join us in promoting the PRM program as the standard for our industry
and that you will join in our efforts to ensure that it will continue to meet the needs of our
members and our industry.

CONTENTS
1 EXECUTIVE SUMMARY
2 PROGRAM DESIGN
2 PROGRAM DATES
AND LOCATIONS
3 FEES AND REGISTRATION
3 TAKING THE OPERATIONAL
RISK MANAGER EXAM
5 OPERATIONAL RISK
MANAGER SYLLABUS
6 PREPARING FOR THE
OPERATIONAL
RISK MANAGER EXAM
PROGRAM DESIGN
DESIGN RATIONALE
The Operational Risk Manager Certificate program
was created at the instigation of PRMIA members
holding senior positions in the industry who felt
there was a gap in the market. It has been designed
by industry leaders, all PRMIA members.
KEY LEARNING OBJECTIVES
The key learning objectives of the Operational Risk
Manager Certificate are to:
Gain an appreciation for the role of risk manage-
ment in the post crisis financial services industry
Gain an appreciation for the role of corporate gover-
nance in an organization and of the participants,
elements and relationships within risk management
governance

The Operational Risk Manager Certificate is relevant
to all risk-related roles in financial services, in partic-
ular Operational Risk Staff, Financial Controllers,
Operations and Technology Managers, and
Compliance and Legal Officers. A grounding in oper-
ational risk management techniques is also becom-
ing increasingly important for front line staff, both
from a process and conduct perspective in their
dealings with clients and market counterparts.
READING MATERIAL
PRMIA Operational Risk Manager
Certificate Handbook
PRMIA Case Studies
Gain an understanding of the different roles in risk
governance and the place of reporting and the use
of various elements of a risk framework
Gain an understanding of the theory and process of
risk management and the expected results from a
successful risk management process
List and discuss a set of developments in the gover-
nance of risk management, with an introduction to
the area of risk culture
Describe the elements of a risk management frame-
work and choose the elements to implement in their
own workplace
Manage an operational risk assessment program
and apply it in their workplace
Understand how to capture, report and investigate
operational risk events, how to produce meaningful
Risk MI including Key Risk Indicator (KRI) data and
trend analysis, and how to implement operational
risk appetite
Be able to recognize how operational risk manage-
ment can assist the overall business and add value

PROGRAM DATES AND LOCATIONS

For your convenience, the exam is offered on every business day of the week.*
You may request to schedule your exams at any time. There is no advantage to taking your exams
on any particular date. Questions within exams are drawn from a large database of questions and
are administered randomly, creating thousands of unique exam forms, all of comparable difficulty.

PRMIA uses the services of VUE, part of the Pearson Publishing family, to administer the ORM
exams. Pearson VUE is a professional testing firm that has nearly 5,000 testing centers in more
than 165 countries around the world.

Please note some important details about registration, cancellation, identification requirements
and space availability in the Registration section found on page 3 and 4.

*Registration and testing for the ORM exam will begin in early 2015. 2
 FEES AND REGISTRATION
FEES
Fees, relevant to your membership status, are given at
http://www.prmia.org/orm-certificate/preparation
Payment by credit card is required for online
purchases. If you would like to make alternative
arrangements, please contact
certification@prmia.org.
REGISTRATION
Registration for the Operational Risk Manager
exam will begin in early 2015. Registration
will be via the link found at
http://www.prmia.org/orm-certificate/preparation.
When you register, a voucher number will be
provided to you that you can use to schedule your
exam at the center, date and time of your choice.

PRMIA Sustaining Members are given a

10% discount on the exam fee. You can
become a Sustaining Member online at
www.prmia.org/individual-membership 90 DAY RULE
Please note that there is a strict PRMIA policy that exams may NOT
If you are interested in adopting the
be retaken within 90 days of a prior sitting. Any candidate attempt
Operational Risk Manager Certificate to transgress this policy by whatever means may result in penalties
as a corporate program, please contact against the candidate which could include forfeit of any PRMIA cer-
membership@prmia.org. Special pricing on tifications, vouchers, and possible expulsion from PRMIA.
exam vouchers and preparatory materials
may be available to your company.

TAKING THE OPERATIONAL RISK MANAGER EXAM

EXAM FORMAT
The exams are computer-based. You will not receive any copies of PERSONAL IDENTIFICATION
the questions. No paper may be brought into the testing center; how-
On the date of your appointment,
ever, you will be provided with an erasable board upon request.
arrive at the testing center at least
Once admitted to the testing room, there will be a tutorial that intro- 15 minutes before the scheduled
duces the functionality of the exam and a brief message from PRMIA. start time. You must bring two
After this has been viewed, you may begin your exam. You will be forms of identification with you.
asked multiple-choice questions with four possible responses. There The first must be a current gov-
ernment-issued ID with your
are no breaks allowed during the exam. The testing system allows
photograph and signature.
you to mark and review questions as long as time is remaining.
Please note that you are unlikely to finish
your exams with substantial extra time. Examples of Acceptable Forms of Government Issued ID
You are encouraged to use the tutorial in Drivers License National Identity Card

an expedient manner, but sufficient time is Passport Military ID

allocated for you to complete the tutorial Examples of Acceptable Forms of Supplemental ID
and the exam. Credit Card Employee ID Card

Examples of Unacceptable Forms of ID

Library Card Social Security Card

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 ARRIVE ON TIME
It is very important that you leave enough time
to arrive at the testing center early.
Candidates that arrive late to the test center
may not be permitted to test. The full charge
for the exam will be made if you are not
admitted for any reason. As these centers
offer exams for other organizations as well,
not everyone in the room will be taking the
same exam, so no assumptions should be
made about when other candidates enter
or leave the testing center.
CANCELLATIONS/CHANGES
In recognition of the busy and changing
schedules of risk managers, you may change
your exam appointment without charge
through the Pearson Vue system at
www.pearsonvue.com/prmia. Please note that
all change requests must be made at least
one business day before the testing date or
the entire exam fee will be forfeited.
Because of the flexibility in rescheduling,
exam fees are non-refundable.

EXAMINATION ADMINISTRATION
Each testing center has an administrator who can assist candidates
with any questions that they may have. In the event of any incident
(computer failure, inadequate supplies, excessive noise, or any other EXAM SECURITY
circumstance) which the candidate believes is not compatible with
The Operational Risk Manager
good examination conditions, this must be brought to the attention of
exam is conducted under
the examination proctor immediately upon the incident being noticed
secure conditions. Any attempt
without continuing the exam. Failure to inform the proctor in this
by candidates to copy ques-
manner will invalidate any subsequent candidate incident reporting
tions, by any means including
which cannot be substantiated by the test center.
unorganized memorizing, and
Your exam results should be available within 15 business days of your to distribute these questions to
test date and will be delivered to you via the PRMIA website which other individuals, will be treat-
you can access by signing in to your PRMIA member page, go to ed as unethical behavior and
Membership then PRM Society and finally My PRM Profile. may result in penalties against
the candidate which could
include forfeit of any PRMIA
certifications, vouchers, and
possible expulsion from
PRMIA. Indictment to copy,
and usage of copied questions
may also result in the same
penalties.

CALCULATORS
An online scientific calculator, Texas
Instrument TI308XS, is part of the test
delivery system. No other materials may be
brought into the exam room with you. It is
suggested that candidates purchase the
hand-held version (TI-30XS) to fully famil-
iarize themselves with the calculator.

4
OPERATIONAL RISK MANAGER SYLLABUS
A. Introduction
Participants will gain an appreciation of the role of risk
management in the post crisis financial services industry. C. The Risk Management Framework
1. Regulatory Context since 2008 Participants will be able to describe the
2. Embedding Risk Best Practices elements of a risk management frame-
work and choose the elements to
implement in their own workplace.
B. Risk Governance
1. Risk Capacity
Participants will gain an appreciation of the role
a. Risk Capacity
of risk management in the post crisis financial
b. Resources and Risk Capacity
services industry.
c. Stress Testing and Simulation
1. Governance d. Setting the Risk Capacity
a. Origins of Corporate Governance
b. Risk Governance and Strategic Planning 2. Risk Appetite
c. Risk Governance Principles a. Risk Appetite
b. The Risk Appetite in
2. People / Roles and Responsibilities an Organization
a. The Board c. An Example Risk
b. CRO Appetite Statement
c. Wider Reporting
d. Systems and Documentation 3. Risk Policies
a. Introduction to Policies
3. Process b. Structure of a Risk Policy
a. Theory c. Risk Policies in an Organization
b. Risk Management Process d. Policy Coverage
c. Results
4. Risk Pricing
4. Risk Governance Developments a. Risk Pricing Introduction
b. Interaction with Internal and
External Partners
c. Capital Costs
SYLLABUS SUMMARY
Number of Questions 5. Risk Culture
Percentage
Section in the Exam of the Exam a. Risk Culture
A Introduction 2 3% b. Leadership and Risk Culture
B Risk Governance 6 10% c. The Role of the Risk Management
Function in Risk Culture
C Risk Management Framework 12 20%
d. The Place of Other Staff
D Risk Assessment 12 20%
in Risk Culture
E Risk Information 12 20% e. Evaluating Risk Culture
F Risk Modeling 8 14%
G Insurance Mitigation 2 3%
H Case Studies 6 10%
Total 60 100%
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D. Risk Assessment
Participants will be able to manage an
operational risk assessment program
and apply it in their workplace.
1. Risk Assessment
a. Risk Assessment Overview
b. Risk Assessment Lifecycle
2. Risk Scenarios (Top Down)
a. Top Down Identification
b. Workshops
c. Example Scenario (DR)
3. Process Models (Bottom Up)
a. Control Identification (Linking
Top-Down and Bottom-Up)
b. Process Reviews
c. Control Framework and
Assessment
4. Operational Risk Issues
a. Identify Issues and Design
Actions Plan
b. Issue Management
c. Residual Risk
d. Management Validation
5. Additional Risk Assessment Topics
a. Risk Assessment of New
and Expanded Products
b. Risk Assessment and
Third Party Services
F. Risk Modeling
Participants will be able to recognize how operational risk
management can assist the overall business and add value.
1. Capital & Risk Pricing
E. Risk Information
a. Basel II and Operational
Participants will be able to describe Risk Capital
operational risk events, Key Risk b. Frequency and Severity
Indicators (KRIs) and Reporting
c. Combining Approaches
and create a KRI framework.
d. Capital Allocation
1. Introduction
a. Risk Appetite and Risk Profile
b. Expected Loss
c. Unexpected Loss
2. Loss Investigations G. Insurance Mitigation
a. Operational Risk Incidents a. Insurance Mitigation
& Investigation Introduction
b. Collecting Loss Data b. Risk Taxonomy and Mapping
c. Quantifying Losses c. Qualification Criteria of
d. Boundary Issues Insurance Mitigation
e. External Loss Data d. Calculation of Capital Relief
3. Key Risk Indicators (KRIs)
a. Introduction to KRIs
b. Selecting Appropriate KRIs
c. Interdependent KRIs
e. Implementing a KRI
Framework
4. Risk Reporting & Toolsets
a. Data Model
b. Workflows
c. Reporting

PREPARING FOR THE OPERATIONAL RISK MANAGER EXAM

PRMIA Operational Risk Manager Certificate Handbook

PRMIA Case Studies

Available at no charge on the PRMIA website

Operational Risk Manager Course Powered by NextThought

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