PRMIA Exam 8020 Topic 8 Question 8 Discussion

Actual exam question for PRMIA's 8020 exam

Question #: 8
Topic #: 8

[All 8020 Questions]

In operational resilience, material customer detriment or significant harm to the customer is which of the following?

AThis has a low threshold and refers to any inconvenience to a customer that results in a complaint.

BThis is when disruption to a service results in an inconvenience to a customer and damage to the firm's reputation.

CThis is the ability of a financial system to continue to function, even in the face of significant disruption or financial shocks.

DThis is when disruption to a service results in not just an inconvenience to a customer, but a material cost or hardship.

Show Suggested Answer

Suggested Answer: D

Step 1: Definition of Material Customer Detriment

Material customer detriment refers to service disruptions that cause financial loss, inability to access essential services, or significant hardship.

PRMIA and UK FCA Operational Resilience Standards define 'significant harm' as going beyond inconvenience to include monetary or operational distress.

Step 2: Why Option D is Correct

Significant harm occurs when customers face tangible financial or service losses, not just reputational inconvenience.

Regulatory frameworks (e.g., Basel, FCA, PRMIA) require banks to protect customers from material disruptions.

Step 3: Why the Other Options Are Incorrect

Option A ('Low threshold, any complaint') Incorrect because not all complaints indicate material detriment.

Option B ('Inconvenience and reputational damage') Incorrect because true material harm is more than just inconvenience.

Option C ('Financial system resilience') Incorrect because this describes systemic financial stability, not customer impact.

PRMIA Risk Reference Used:

PRMIA Operational Resilience Framework -- Defines material customer detriment.

UK FCA Operational Resilience Guidelines -- Requires firms to minimize severe harm to customers.

Final Conclusion:

Material customer detriment involves actual financial hardship, not just inconvenience, making Option D the correct answer.

by Jerlene at Mar 24, 2025, 04:29 PM

Limited Time Offer

25%

Off

Get Premium 8020 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Alaine

1 days ago

I agree with Louvenia, D makes sense because it involves material cost or hardship.

upvoted 0 times

...

Louvenia

2 days ago

I think the answer is D.

upvoted 0 times

...

Simona

8 days ago

Option D is clearly the correct answer here. Material customer detriment is when the disruption to a service results in a significant hardship or cost to the customer, not just an inconvenience.

upvoted 0 times

...