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FMEA Definitions for Financial Services

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  • #24495

    fmea
    Participant

    Does anyone know where I can get definitions for severity, occurrence and detection categories for financial services?Β  The set of definitions I have are from a manufacturing perspective and don’t work well.

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    #58761

    mpl
    Participant

    You can search here:
    http://www.fmeainfocentre.com
    Also, D.H. Stamatis has a comprehensive text on FMEA, although I can’t say for sure if he addresses financial FMEA.
    Good luck.

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    #58762

    Ovidiu Contras
    Participant

    The definitions are pretty much the same:
    Severity: How bad the impact on the customer will be if the failure occcurs?
    Occurence: what are the chances that this could happen?
    Detection: what are the chances we detect this (with current controls)Β before it hits the client?
    Your team’s homework is to put in place the criteriaΒ  and rate them from 1 to 10Β (10 being the worse case). For example, a rating of 10 for Severity in your case: “if this failure occurs, the customer doesn’t get the money and we violate gouvernment regulation #xyz” ….

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    #58763

    TwoCents
    Member

    I would agree that the terms severity, occurence, and detection are pretty much universal, but if they don’t quite make sense to your team, make up new ones that do.Β  Try a thesaurus…
    How about:
    Severity = Impact
    Occurence = Frequency
    Detection = Noticability (this one’s a little weak, but…)

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    #58764

    Dale
    Participant

    At a large bank, we use:

    Rating
    Severity of Effect
    Likelihood of Occurrence
    Ability to Detect

    5
    Almost Certain failure to complete an accurate Cash Action Plan
    Very High: Failure is almost inevitable 95%
    Little to no chance of detection

    4
    High Probability of failure to complete an accurate Cash Action Plan
    High:Β  Repeated Failures 75%
    Very low chance of detection

    3
    Moderate probability to complete an accurate Cash Action Plan
    Moderate: Occasional Failures 50%
    Moderate chance of detection

    2
    Low probability to complete an accurate Cash Action Plan
    Low: Relatively few failures 25%
    High chance of detection

    1
    No Effect
    Remote: Failure is unlikely less than 25%
    Almost certain detection

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    #58769

    Prabal Aggarwal
    Participant

    Dear Friend
    If you are not satisfied by the universal definitions available, then you can create your own. For this you may use the terminology used by your customer for e.g. if the customer is always gauging failure in terms of money loss, you may put a term financial loss as severity. Similary, you may find apt terms for occurence and detection. And above all this table is jotting down common sense in form of table. If you are clear about the objective then you may modify the whole tool according to your needs.
    Prabal Aggarwal

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    #58809

    KS
    Participant

    Hi Dale,
    What exactly do you mean by “cash action plan”
    Thanks
    KS

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    #58825

    Som
    Member

    Class Action is an event when a group of corporates (who are stake holders) file a single suit against a corporation in the court of law…
    Instead of every stakeholder filing individual suits for the same incident the group files one single case. The outcome (financial claim) is shared / distributed in pro-rata between the individual stakeholders….
    Best examples could be the Enron or Worldcom debacle…where the stakeholders filed a single suit…
    Its more useful because the banks investment in various geographical boundries and its not feasible to have compliance in each of this country. And the suit will be filed in the court of law of the respective countries, so there are special attorneys who have their network across different countries and act as one point of contact for all banks!!!
    hope this serves your question…

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