Likelihood Template

Very likely

50% chance of happening in the next 12 months or occurs at least once every 2 years

Likely

20% – 50% chance of happening in the next 12 months or occurs once in every 2 to 5 years

Possible

10% - 20% chance of happening in the next 12 months or occurs once in every 5 to 10 years

Remote

10% chance of happening in the next 12 or occurs less than once in every 10 to 20 year

Very remote

5% chance of happening in the next 12 months or occurs no more than once in every 20 to 100 years or less

Extremely remote

1% chance of happening in the next 12 months or occurs no more than once in every 100 to 200 years or less

FACTORS THAT ARE DRIVING THE LIKELIHOOD

Note:

For ICARA/ICAAP prudential capital analysis, we need to start with the mindset that we need need a 'forward-looking' analysis of the likelihood, or the chance of occurrence for a risk scenario.

Therefore:

1. We are looking as of 'today' or 'the time of analysis' into a one-year horizon
2. We need to take into account 'avaiable' information, both internal and external
3. Though we are looking forward we will be also considering historical information too
4. We will need to also take account of the firm's busines model, existing products, customers, legal and regulatory environment as well as the current control framework, especially the preventative controls

Some of the useful sources are:

1. The firm's data on past losses, near misses, issues, events data, relevant audit findings & reports
2. The firm's Risk Control Self Assessments (RCSA) that are relevant
3. The firm's technology resilience
4. The firm's state of the BCP plans
5. The firm's exposure to third parties
6. External relevant loss and event data
7. Market reports relevant for the scenario, e.g. Cyber risk reports on the cost of data breaches
8. FCA or other regulatory body data on relevant fines or section 166s
9. External environmental factors such as current trading and market conditions
10. Market data on current trends and velociy of events