ORX Annual report: Leading the way
- 1 May 2019
Read our latest annual report to find out more about ORX, the value we provided in 2018, and how we'll be continuing to develop and grow in 2019.
A year of good progress
The following are excerpts taken from the annual report’s introductory letter from our Chairman, Mark Cooke (Group General Manager, HSBC).
Our new strategy
In 2018, ORX embarked on an ambitious new three-year strategy. We are ambitious because we believe that operational risk is important, increasing and challenging. Our goal is to use the ORX platform to meet the new challenges in operational risk. We’re shifting our focus from measurement to management, leading the debate and providing the best network for peer exchange.
In 2018, we were delighted to welcome six new members. Four banks joined and two insurers. This brings our total membership to 97 (as of January 2019).
Loss data exchange remains a core service for ORX. We run our Global Banking and Insurance services and five national services – in 2018 we agreed a new Nordic service. We received almost 80,000 losses from nearly 600 submissions in 2018, building to a total database of operational losses exceeding 700,000 events. This provides our members with an unrivalled resource.
Our ORX News service is hugely valued and very popular. A total of 69 institutions now subscribe, up eight from 2017. Sixty-one subscribers are from member institutions and eight from non-members. This means that we provide a database of more than 7,500 up-to-date operational risk case studies to over 6,000 individual operational risk managers.
Similar growth has been seen in the membership of ORX Scenarios. A total of 50 institutions now subscribe to our scenario service, 48 from member institutions and two from non-members. The scenario library now contains over 1,000 scenario stories from 47 institutions.
A key role for ORX is the exploration of new ideas and new practice. In 2018, we continued to offer new research.
In thought leadership, we provided a direction on big new challenges, pushing forward industry practice. We explored the emerging operational risk umbrella function and how firms are risk-managing change in 2018. We also started the development of a new reference industry operational risk taxonomy, a critical foundation for advancing industry practice and future information sharing.
On risk management we have now established ORX Practice Benchmarks, which look to document practice in all key framework elements and offer individual practice benchmarks. In 2018, we completed work on controls, outsourcing, risk appetite and risk identification.
“The global industry service and research is second to none.”
On risk measurement, we continue to explore practice and outcomes, with studies including: the SMA, model risk, stress testing and capital benchmarking. We have also started to offer a forum for the discussion of the application of advanced analytics to the problems posed by operational risk. We want to share practice and leverage these new techniques for ORX work.
We therefore start 2019 in a strong position. We are executing our strategy, we are growing, we have the support of our members, we are delivering value, and we have strengthened our platform.