PA - Banco Security

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B. Operational risk structure
The Operational Risk Control Area reports to the Bank’s Risk Division and directly reports to the division manager.
In accordance with the operational risk policy approved by the Board of Directors, the risk management is supported by: the individuals
responsible for and executors of the processes, who are the primary risk managers; the operational risk area that is responsible for the
management and monitoring of operational risk; the Board of Directors and the Operational Risk Committee who are responsible for
ensuring that the Bank has an operational risk management framework in accordance with the objectives defined and best practices,
and that there are the required conditions (trained personnel, organization structure, budget) that allow the Bank to implement such
framework.
C. Operational Risk Processes
For an appropriate risk management and to comply with the objectives set by the Bank in accordance with the Operational Risk
Policy, the following activities have been performed:
Training: Train the organization’s personnel through talks and e-learning so that the organization becomes aware of and understands
operational risk, and the Bank’s mitigation policy.
Event Management: This includes the mitigation of risks that does not involve implementing a project or acquiring resources. The
mitigation o these risk involves creating a control or changing a process.
Database: This involves systematically recording events that involve operational risks.
KRI’s: These are quantitative measurements that provide knowledge of certain and potential risks and allow the Bank to identify
an increase in exposure beyond acceptable values. They are aimed at providing immediate and early information about possible
operational risks in different areas of the Bank.
Self-Assessment Survey: The Bank’s main managers were surveyed in order to identify operational risk processes and events.
Suppliers: Compliance with regulation 20-7 issued by the SBIF.
Risk Survey: This is a process focused on identification, analysis, evaluation, mitigation plan, responsible individuals, follow-up and
reporting related to risks identified in different areas, particularly processes and procedures.
Risk Mappping: This activity is performed after surveying risks where risks are organized based on a structure in accordance with
macro processes and processes defined by the Bank. After an individual evaluation, this allows the Bank to identify the most
important and high priority risks by process.
6) Risk Committees
In order to manage risks properly, Banco Security has different risk committees as follows:
A. Credit Risk Committees
There are 3 credit risk committees, as mentioned above: The Board of Directors Credit Committee, the Manage Credit Committee
and the Client Folio Circulation Credit Committee. The conditions that each operation should comply with to determine in which
committee the operation should be presented are clearly specified in the Bank’s personal and corporate banking credit risk policies.
It should be noted that the commercial area has almost no attributions by itself. As a result it must almost always have the approval
by the credit risk areas or corresponding committees to approve the corresponding operations.