**Research on the Operational Risk Scorecard Method**
Although the study of operational risk is becoming increasingly necessary, it is still relatively a new field. From the perspectives of market and credit, it is easy to understand. We know what risks there are and how to evaluate these risks — market risk stems from a bank's market strategy portfolio, while credit risk comes from its credit strategy portfolio.
However, what conclusions do we want to draw from the assessment of operational risk? Operational risk refers to the risk of loss caused by insufficient capabilities or failures in processes related to technology, talent, organizational structure, or external factors. Therefore, what we need to evaluate is the part of banking operations related to business processes. Compared with a bank's market and credit strategy portfolios, the bank’s business processes can also be referred to as the operational strategy portfolio.
If we assess a bank's business processes, we need to report the results. The correct approach is to use an operational risk scorecard. Many reports are called scorecards. They all use scores to reflect a specific context. For example, the well-known balanced scorecard, simply put, is a report that uses scores to record how a bank implements its vision and strategy in terms of finance, business development, learning and growth, as well as customer satisfaction.