Modeling the unexpected

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

Specifically, we help financial institutions develop structured assessments for their key operational risk scenarios (cyber, conduct, disruption, fraud, etc.) and assess the stress of climate change on operations and risks.

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Olivier Vigneron to become Group Chief Risk Officer of Deutsche Bank.

Congratulations for this new chapter that opens at Deutsche Bank! We are proud and grateful that Olivier was one of the first promoters of the XOI method for operational risk, and to have worked with him and his teams for many years. Greetings and thanks from the MSTAR team.

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Congratulations to Venkat on being chosen as the new CEO of Barclays!

We are proud to have worked with Venkat for several years and that he was one of the first sponsors of the XOI method! Thanks and congrats!

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ORX Forum

ELSEWARE/MSTAR will be speaking on climate stress on operational risk at the ORX forum on September 23. In particular, we will be presenting the work we have done on this topic with the American Bankers Association and a group of banks.

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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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