Operational risk

Operational risk is defined as the possibility of incurring losses due to failed processes or internal systems, mistakes by people, or due to external events, such as legal incidents or natural disasters, excluding strategic and reputational risks.

The operational risk management model that Bankinter follows is known as the standard method, in accordance with solvency regulations in force. Moreover, Bankinter ensures access to best sector management practices by participating in the Spanish Operational Risk Consortium, which is a private forum of financial institutions to exchange experiences regarding operational risk management.

These losses are concentrated mainly in the branch distribution network (72%). Although most transactions are performed using remote channels, these barely represent 0.5% of the losses, which reveals the importance of the human factor as the trigger for operational errors and the strength of automation and Bankinter's distance network contracting procedures (Internet, telephone banking, Smart phone banking).

With regard to loss events, Bankinter's operational risk profile is summarised in the following charts.