Operational risk capital modeling combines internal loss data, external loss databases, scenario analysis, and business environment factors. Banks under Basel III Advanced Measurement Approach calculate 99.9% one-year VaR for operational losses. The model aggregates risks across event types like fraud, systems failures, and legal actions using loss distribution approaches or scenario-based methods. Wells Fargo's 2020 operational risk capital reflected billions in conduct-related losses. Challenges include sparse high-severity data, correlation assumptions, and model validation. Many institutions supplement models with qualitative overlays and stress testing to address limitations.