Operational Risk Scenarios White Paper
- 14 April 2021
From risk measurement to risk management and beyond
What does the future hold for operational risk scenario analysis? Throughout 2020, we held a series of conversations with operational risk managers, scenario practitioners and Heads of Operational Risk from financial firms based around the world to find out. These discussions focused on three main themes:
- The current use of scenario analysis and recent developments within the framework
- The use of scenarios for active risk management
- Future use of the scenario methodology
Download the free white paper, Operational Risk Scenarios: From Risk Measurement to Risk Management and Beyond, from ORX Scenarios to see how scenario analysis and methodology could develop to support active operational risk management in the financial sector.
About the white paper
The current state of operational risk scenario analysis
The white paper, Operational Risk Scenarios: From Risk Measurement to Risk Management, starts by looking at the original purpose of scenarios ‐ capital calculation – and how they are being used currently.
Our discussions showed that while scenario analysis is still primarily being used to support the measurement of operational risk, the industry is looking for opportunities to gain risk management benefit from the exercise. We found that most firms are working on framework improvements and optimisation, such as making the process less time consuming or using risk drivers.
Where firms are in their journey from risk measurement to risk management
Evolving to support active risk management
The paper then explores how financial organisations can move from using scenario analysis for risk measurement to using it to deliver risk management benefits, covering examples such as playbooks and investing in controls. Finally, we look at how scenarios can be used to simulate business decisions.
About ORX Scenarios
This white paper was produced as part of our ORX Scenarios service. Available to members and non-members of ORX alike, ORX Scenarios gives you the tools and information you need to create and review operational risk scenarios, while also giving you the opportunity to become part of a global network of scenario experts.
Subscribing to ORX Scenarios means you can access a comprehensive library of almost 1,000 scenarios created by other financial firms worldwide. You’ll also be able to access a wide range of resources all designed to enhance and support scenario practice.