Emerging tech is industry's top emerging operational risk
- 24 May 2021
The latest ORX Operational Risk Horizon study identified emerging technology as the industry's most concerning emerging operational risk.
Over 45 financial institutions took part in this study, sharing their views on what constitutes an emerging operational risk and which emerging risks they were most worried about. Emerging technologies was perceived as the biggest risk, followed by climate risk and then geopolitical tensions.
The risks of emerging technologies
A broad and varied category
Emerging technologies covers a broad range of factors – which in itself makes it a challenge to monitor. Firms need to monitor multiple specific technologies, all of which are emerging at different rates with some already having real-world applications while others are still largely theoretical (for example, quantum computing).
Technology drives wider industry changes
Developments such as open banking APIs and digital currencies are transforming the market and customer behaviour. 'Traditional' financial organisations need to ensure that products and services remain competitive against disruptive market entrants.
Cybercrime is an ongoing threat
As all these technologies evolve and transform the industry, they create even more potential avenues and vulnerabilities for cyber criminals to exploit. Firms are working hard to respond to this, and our new service, ORX Cyber is starting to lead the way as a central hub for cyber risk professionals to collaborate, exchange ideas and learn from each other’s practices
Climate risk and geopolitical tensions are interlinked
The second and third top emerging risk factors in the ORX Operational Risk Horizon 2021 relate to climate change and geopolitical tension. The study highlights how these risks are interrelated – for example, as physical climate risks materialise, geopolitical risks can become a key concern and potentially drive new cyber threats.
Find out more in the Operational Risk Horizon report
The Operational Risk Horizon 2021 report offers an overview of the industry’s top emerging risk categories and the interconnected risk factors that drive them. It explores a number of categories in further detail to highlight key emerging industry considerations. The report also examines how emerging operational risks are identified and managed and summarises the direction of travel in the operational risk industry. The report is available for free to our members and for just £750 to non-members.