Operational risk & coronavirus: how are firms responding?
- 31 March 2020
Helping financial organisations respond to coronavirus
We want to do everything we can to support our member firms in dealing with this new and continually evolving challenge. So, we’re holding regular calls to give our members the chance to discuss coronavirus and its impact on operational risk. We also ran a survey on how financial organisations are reacting to coronavirus (COVID-19). More than 50 institutions took part to our survey and over 60 have joined in our discussions so far.
Summary of calls held on 24 March
On 24 March, more than 60 organisations joined us to discuss virtually the impact of coronavirus and what operational risk functions are doing in response. Among other things, they told us they are moving away from focusing on immediate business continuity concerns. These are the areas they're focusing on now:
- Assessing a new risk profile
- Streamlining and focusing risk management
- Identification of critical operations key to resilience
- Assessing and developing pandemic scenarios
- Preparing for loss event collection
- Preparing for lessons learned
Future topics for discussion
Based on our initial discussions with our member organisations, here are some of our proposed topics for future calls focused on coronavirus:
- Impact on third party and supplier risk
- Pandemic scenario analysis
- Impact on conduct, fraud, and cyber risk
- How to record the cost of pandemic, and future consequences for capital and stress testing
- Regulatory interactions and focus over this period
Responding to coronavirus: ORX Membership survey Febuary 2020
In February, we surveyed our member organisations to see how they were currently responding to coronavirus from an operational risk perspective. Here's what they told us at the time.
Here’s a quick breakdown of our key takeaways so far:
1. Communication is key
All our members have agreed that good communication is vital. Make sure that all communication is clear, timely and factual.
2. Business continuity plans are being stretched
The global nature of coronavirus means that everything, and everywhere, is being hit at once. Businesses need to be prepared for simultaneous impact across multiple locations, rather than just one office, town or country being affected.
3. Evaluate your response daily
As the Coronavirus situation develops, organisations need to evaluate their response regularly – usually on a daily basis. This then needs to be communicated internally (refer back to the first point!).
4. Consider the impact of your organisation’s response
It is important that you take into account the impact of your institution’s response to coronavirus. For example, more people working from home may change your risk profile or, in some cases, employees are unable to carry out certain tasks if they are not based in the office.
Don't go it alone
ORX is founded on the principle of bringing financial organisations together to share data, experiences and ideas, and it's exactly at times like these when working together is definitely more valuable than working alone. Find out how you can become part of a global community at the forefront of operational risk management,