Future of loss information

  • 6 July 2017

Throughout 2017 we're running a project reviewing how loss information could evolve to meet the changing requirements of operational risk management. We want to identify ways to increase the risk management value of external loss information and better map external loss data to the business and risks.

The future of loss information

Why do we need to review loss information?

As a discipline, operational risk is moving away from a focus on regulatory capital calculation towards the more active measurement and management of operational risk. As the industry shifts focus, our Members want to develop common standards and approaches for sharing more information, providing more insight to management.

How are we doing this?

Working closely with our Members, we're exploring how to increase the risk management value of external loss information and better map it to the business and risks. We're looking at what new types of loss information could be exchanged and what changes could be made to the existing information.

Twenty-six Members, representing the diversity of our Membership, have shared their thoughts on the future of loss information. They were asked to provide feedback on the existing ORX global loss data and identify the information they will need in the future for regulatory, measurement and especially management purposes. 

The key themes from these conversations have been consolidated to present a set of provisional views of the types of loss information needed. These were discussed at our Heads of Operational Risk Forum in Cape Town in April 2017.

The broader ORX community were given the chance to evaluate these proposals, focusing on the value they provide and the preferred mode and frequency of exchange and threshold. We also held a roundtable event, allowing interested Members to meet their peers and discuss the results of the survey.

We are now in the process of writing up the results.

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