Skip to content

FRM Part II · FRM Exam Part II · Case Study: Financial Crime and Fraud

After a payments fraud, a bank's board asks the operational risk function how to demonstrate resilience rather than just recovery. Which metric best reflects resilience as the ability to continue delivering critical services within tolerance during disruption?

The best resilience metric is how long the critical service remained within its defined impact tolerance during the event. Resilience concerns continuing critical operations under disruption. Recovery ratios, case counts and headcount describe loss outcomes, frequency or resources rather than service continuity within tolerance.

  1. ATotal fraud losses recovered divided by gross fraud losses
  2. BNumber of fraud cases reported in the prior year
  3. CTime the critical payment service stayed within its defined impact tolerance during the eventCorrect
  4. DHeadcount of the fraud investigation unit

Explanation

Resilience focuses on delivering critical operations within pre-set impact tolerances during disruption. Recovery ratios measure loss outcomes after the fact, case counts measure frequency, and headcount is an input and not an outcome of service continuity.

Did you get it right without looking?

One question tells you little. A timed set on Case Study: Financial Crime and Fraud shows your real accuracy, how long you take and where you lose marks.

Practise Case Study: Financial Crime and FraudFree diagnostic mock

More Case Study: Financial Crime and Fraud questions