Operational risk assessment: a fuzzy logic approach

This paper presents an integrated approach to evaluating operational risk based on a hierarchical system of risk factors. Employing a fuzzy logic expert system both quantitative and qualitative data can be aggregated to the total operational risk. The procedure is explained by the subsystem IT security. For selected risk categories the expert rule maps and the fuzzy inference process are described in detail. A numerical example illustrates the course of the fuzzy expert system using the new developed software tool Visual Fuzzy.