What does operational risk in payment systems refer to?

Operational risk in payment systems primarily refers to the potential for loss due to inadequate processes, systems, or human errors. This encompasses a wide range of issues that can disrupt the function of payment systems, including failures in internal controls, mismanagement of payment processes, technological breakdowns, or human mistakes. Such risks can lead to financial loss, inefficiencies, or compliance failures, making it imperative for organizations to have robust operational risk management frameworks in place.

The other options clarify other types of risks but don't encompass the full scope of operational risk. Transaction delays relate more specifically to performance issues rather than the overarching concept of organizational processes. Currency fluctuations are related to market risks that affect the value of payments being processed, while threats from external cyber attacks pertain to security risks that can compromise the integrity and confidentiality of payment systems. While all these factors could impact the overall risk environment of payment systems, operational risk specifically addresses internal vulnerabilities that impact day-to-day operations.