Which of the following illustrates a common source of operational risk?

Human error during service delivery exemplifies a common source of operational risk because it pertains directly to the daily operations of an organization. Operational risk arises from inadequate or failed internal processes, people, and systems, or from external events. The potential for mistakes made by employees, whether through miscommunication, lack of training, or oversight, can lead to service disruptions, financial loss, or reputational damage. This type of risk is inherent in the day-to-day functioning of an organization and can significantly impact performance and efficiency.

In contrast, while natural disasters affecting supply chains, market changes affecting product offerings, and changes in regulations are all significant risks, they generally fall outside the internal operational framework. Natural disasters relate more to environmental risks; market changes are often categorized under strategic or market risks; and regulatory changes pertain to compliance risks rather than operational risks. These different categorizations highlight why human error, rooted in the internal operations of an organization, is a quintessential example of operational risk.