Measures of Association Applied to Operational Risks

Association rules are a basic analysis tools for unstructured data such as accident reports, call centres recordings and CRM logs. Such tools are commonly used in basket analysis of shopping carts for identifying patterns in consumer behaviour. In this chapter we show how association rules are used to analyze unstructured operational risk data in order to provide risk assessments and diagnostic insights. We will also present a new graphical display of association rules that permits effective clustering of associations with a novel association rule called the Relative Linkage Disequilibrium.