ORX enhances Operational Risk Reference Taxonomy guidance for 2023

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Over the past few years, ORX – supported by Oliver Wyman – have created an Operational Risk Reference Taxonomy. The strategic aim of this work is to support financial institutions to create their own internal operational and non-financial risk taxonomies, as well as encourage more consistent data sharing across the industry. The taxonomy incorporates both an Event Reference Taxonomy and a Cause and Impact Taxonomy.

Feedback from a recent survey of over 60 members from around the world indicated that the ORX Reference Operational Risk Taxonomy is being adopted or considered a standard across the financial industry. Our members report it saves them time and money in implementing their own taxonomies, and comment on its value as an industry benchmark.

What have we added to the guidance?

Based on this survey feedback and to support our community further in these areas, ORX has republished the Event Type Reference Taxonomy with additional guidance on:

• Third party/vendor fraud
• Rogue trading
• Climate risk
• Transformation risk
• Strategic Risk
• Resilience theme
• Artificial Intelligence and Machine Learning
• Control failures and boundary risks
• Use in conjunction with the Cause and Impact Taxonomy

We have also republished the Cause and Impact Taxonomy with additional guidance on:

• Mis-selling
• Malice
• Third party failure

Find out more about the ORX Reference Taxonomy

The ORX Reference Taxonomy, including both the Event Type and the Cause and Impact Taxonomies, is available for any firm to download and start using at your firm for free.

You can also purchase the guidance documentation, which provides detail on each level 1 risk, explains how to use flags and risk themes to add further context and insights to your data, provides information and definitions for specific cause categories and more.