modelling the unexpected

Elseware helps clients assess risks prospectively, when relevant data is scarce and available knowledge is still uncertain

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How to quantify potential climate or ESG-related litigation for banks?

We have identified three channels of exposure: customers, products and information. This video focuses on products, in particular funds.

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How to quantify the risk of climate litigation for banks?

Clients are a major source of banks' exposure to climate-related litigation. Indeed, the financing of a project can be seen as part of the causal chain of environmental damage. Watch this video to understand how this emerging risk can be quantified, by combining external data on climate-related litigation with internal data linked to portfolio sector allocation.

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GCOR Conference 2023

Join us virtually to discover how to identify and assess climate risks that could expose banks with the innovative XOI method.

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The XOI Methodology

We are the designers of the XOI methodology, which is adopted by some of the world's leading financial institutions. The XOI approach (Exposure, Occurrence, Impact) decomposes the risk into 3 dimensions.

The number of resources exposed independently to the occurrence of an event. Exposed resources can be employees for fraud, suppliers for disruption, trades for errors, products for mis-selling, etc.

This is the probability of occurrence of the considered event for one particular resource. This probability may depend on the resource itself of the firm controls and on external circumstances.

This is the cost of the event should it occur for one particular resource. This cost is variable and depends on the resource itself, of the firm controls, and on external circumstances.

To learn how the XOI methodology can help you assess and evaluate operational risks, contact us

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Main references

The XOI Method and MSTAR tools are used by some major financial institutions.
  • Aviva
  • Barclays
  • Bank of Montreal
  • Cartes Bancaires
  • Credit Mutuel
  • Credit Suisse
  • La Banque Postale
  • JP Morgan Chase
  • Natixis
  • SocGen

The XOI method and MSTAR have been used for regulatory approved internal risk measurement methods.
They have been adopted by the American Bankers Association as a tool for peer benchmarking of oprisk scenarios.

Click on the map or here to see the up to date reference list.

Tools and Services

MSTAR Desktop

Structured Scenario Design and Assessment

Working with traders exposes a firm to rogue trading; selling products exposes a firm to mis-selling and to anti-competitive practices; operating in buildings exposes a firm to natural disasters or terrorist attacks. From this point of view, operational risk is exposure based.
The design of a loss generation mechanism for a given scenario starts by identifying the Exposure for a scenario, i.e. the resources of the firm exposed to the event considered. A scenario is then fully defined by the resource (Exposure), the event (Occurrence), and the consequences (Impact).

MSTAR Desktop implements the XOI method and allows to you to design and quantify your own scenarios. Design and quantification are kept independent in order to allow independent quantification in different legal entities or business units.
The distribution of potential losses are calculated using simulation. Scenarios can be tested for what-if analyses, and aggregated with various correlation methods (causal dependencies, copulas, etc.)

MSTAR Platform

Be informed of what happened. Understand what could happen.

The MSTAR platform gives you access to a comprehensive library of operational risk scenarios exposure models and to a free news feed of operational risk news.
At the moment, 36 scenarios are available in the library in 7 risk categories : Conduct, Cyber, Disruption, Error, External Fraud, Internal Fraud, and Legal.
You can register for free on the MSTAR platform.

The MSTAR platform also exists as a peer platform hosted by trusted third parties to help you benchmark your scenario assessments.
The first MSTAR Peer platform hosted by American Bankers Association is online.


A team of experts, researchers, and developers.

Elseware team is composed of highly qualified experts who are exclusively dedicated to applied risk research.
We design and develop innovative modeling methods, implement them in our tools, and apply them at leading financial institutions.

We have helped to completely redesign the operational risk scenario programs of several large financial institutions. We regularly assist our clients in meeting regulatory (CCAR, ICAAP) or non-regulatory requirements (e.g. climate stress exercises or TCFD). We also assist them during internal and external audits.

To learn how our tools and teams can help you assess and evaluate operational risks, contact us

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85 rue Edouard Vaillant
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