Reimagining Operational Risk
- 29 July 2020
In 2019 and into 2020, ORX invited senior leaders from across the operational risk community to join us in a discussion about reimagining operational risk management for the digital era.
The digital transformation is underway
From our global viewpoint of the over 100-strong ORX Membership, we see that the financial services industry is undergoing a period of rapid change.
Technological innovations, new market entrants and changing customer expectations are all challenging existing business models and upending the way firms deliver products and services to their customers. Across the back office too, firms are implementing new technologies, systems, data and processes in their journey towards a digital operating model.
Given the level of investment we are seeing, and the implications of these changes, ORX are increasingly confident that the digital transformation represents a structural shift for the industry.
Creating a risk function for the digital era
This change is already having profound consequences for operational risk, so is it now time to rethink the core purpose of the discipline? It feels to ORX that the function needs a restated vision and that the existing framework needs assessing.
Solving this challenge will not be easy, especially in isolation, and we believe that the operational risk community would benefit from a strategic discussion amongst senior leaders about the topic. This would be to understand:
- The main business outcomes of digitalisation
- The consequences for risk and specifically for risk management
About the study
- To begin, we are asking risk leaders to commit to an hour-long phone interview. We’ll send some simple questions in advance and then an anonymised report summarising our discussions as a reward
- During the second stage of the study, we will conduct a series of internal workshops with operational risk practitioners from individual firms
- Finally, we will conduct a series of workshops with the participants (these were planned to be at HORF in April 2020, but due to coronavirus we are exploring alternative options)
Participants in the discussion will receive a detailed report that brings together findings from across all of the above workstreams.