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In the context of banking, IT Risk is indeed considered a sub-category of Operational Risk. Operational Risk encompasses a wide range of risks that arise from the day-to-day operations of an organization, including risks associated with people, processes, systems, and external events. IT Risk specifically addresses risks related to information technology systems, which are critical in banking operations. These risks can include system failures, data breaches, and issues related to the integrity and availability of IT services.

Operational Risk management in banking includes assessing vulnerabilities in technological infrastructure, ensuring that IT systems function effectively without interruptions, and safeguarding against cyber threats. By recognizing IT Risk as a component of Operational Risk, financial institutions can develop strategies and controls that specifically target technology-related vulnerabilities, ultimately enhancing overall operational resilience.

Financial Risk, Market Risk, and Compliance Risk represent different dimensions of risk that while important, do not fall under the operational risk category. Financial Risk relates to the potential for financial loss due to changes in market conditions or credit risk. Market Risk is concerned with potential losses due to fluctuations in market prices. Compliance Risk pertains to the risk of legal or regulatory sanctions and is fundamentally distinct from operational aspects of running a business.