Evaluating the Operational Risk of Chinese Personal E-Banking

E-banking has become an important innovation to bank industry. Although it has some peculiar advantages, its risk seems more complexity and aggressiveness for its inherent nature. For Chinese e-banking, the most important risk is operational risk, which hinders the development and expansion of Chinese E-banking. Among the Chinese E-banking businesses, the losses of personal e-banking happen more frequently and badly affect the development of e-banking, so we study the operational risk of personal e-banking. We analyze the situation of operational risk of Chinese personal e-banking, and with the small loss data sample, use the peak-over-threshold method to evaluate the severity of the losses, the frequency of the excesses losses and expected shortfall under different confidence, simulate the annual operational loss of Chinese personal e-banking. The results seem credibility and reasonability with the tail test on excesses. The method gives a reference to answer the question that how much the operational risk of Chinese personal e-banking is.