Operational Risk

Operational risk summarizes the chances and uncertainties a company faces in conducting its daily business operations

Operational risk is heavily dependent on the human factor

Is defined as the risk of loss from inadequate or failed internal processes, people and systems or from external events

Significant losses for Wirecard shareholders and bondholders (junk status)

Loss of trust and confidence in the German financial market, as well as the broader EU financial market

Heightened scrutiny of financial reporting and auditing practices, particularly for fintechs

Negative impact on the reputation of German regulators and supervisory authorities, raising questions about the effectiveness of their oversight and enforcement

Calls for increased regulation and oversight of fintechs

Review of the role and responsibilities of auditors, particularly in regards to detecting and preventing financial fraud

Examination of the systemic risks posed by large, interconnected financial institutions and the need for effective risk management and supervision

FISG passed in 2021, stricter mandates for corporate governance and revamp of audit regulations

Consideration of stronger and more harmonized regulations and supervisory frameworks across the EU