ENBIS-8 in Athens

21 – 25 September 2008 Abstract submission: 14 March – 11 August 2008

Advances in Operational Risk Management: Statistical aspects of the MUSING project on combining semantic and quantitative data in risk assessment

22 September 2008, 14:40 – 15:00

Abstract

Submitted by
Ron Kenett
Authors
Ron Kenett and Yossi Raanan
Affiliation
KPA Ltd., Univ of Torino, Italy and College of Management, Buisness School, Rishon LeZion, Israel
Abstract
Operational Risks are rising out of the ever-growing Information and Communications Technology systems. Operational Risk (OpR) is everywhere in the business world and, indeed, even in our households. When computing technologies encompass so much of our daily work life the risks associated with them lead frequently to unwanted and hazardous results. In extreme cases, these risks may become catastrophic and cause bankruptcy or other grave consequences. Thus, it is a very important to address OpR in a systematic, scientific, experience-based and results-driven approach.

MUSING (MUlti-industry, Semantic-based next generation business INtelliGence) is an R&D initiative co-funded by the European Commission in the context of the VI Framework Programme (http://www.musing.eu). The main objective of the 4 year project, started in 2006, is to design, develop, and test Business Intelligence services combining unstructured data such as text, with structured data, such as balance sheets. The innovation in MUSING is in the use of advanced statistical and data mining methods, such as Bayesian Networks, with new sophisticated technologies based on the semantic analysis, such as ontologies and XBRL. MUSING tools have been applied to data and information gathered from internal databases, as well as external data sources (Internet, financial newspapers, etc.), thus supporting and helping several time and money consuming activities, such as
- Automatic extraction of information from several digital information sources
- Identification and mapping of Operational Risks (OpR)
- Development of practical solutions for SME for OpR mitigation
- Web based services in support of SME internationalisation

The talk will cover the main innovation in MUSING, with an emphasis on the role of statistical methods in integrating qualitative, semantic based, data and quantitative information, to produce a comprehensive Operational Risk Management System. Specifically, we will cover a case study based on an application of MUSING methodology to a telecom operator.
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