Understanding emerging risk

  • 28 October 2016

"Emerging risks are those that have the potential to add to or increase a firm's current key risks in the next 18-36 months."

In 2016, we began work to enhance industry understanding of how emerging risks are defined, identified and assessed and the structures in place to support this activity, and what the top emerging risks are on the horizon. So, we conducted two pilot projects, the Emerging Risk Methodology Study, and the Emerging Risk Inventory.

Emerging Risk Methodology Study 

Twenty banks and insurers took part in the Emerging Risk Methodology Study. The study commenced in Q4 2015, with participants completing a questionnaire on their emerging risk practice. We then interviewed each participant to discuss their practice in more detail, before summarising our findings in a report – Scanning the Horizon: ORX Emerging Risk Methodology Report 2016.

Emerging Risk Inventory

Our members asked us to develop a resource to help identify new risks and validate internal emerging risk registers. Nearly 40 banks and insurers completed the exercise. Each participant submitted their top emerging risks with a ranking, a free-text description and potential impact time horizon. We collated and analysed the submissions, before publishing a full report to our members.

Here are some of our key findings and the executive summaries from the studies.

Top two most popular emerging risk areas by participant HQ region

Top two most popular emerging risk areas by participant HQ region

Future work

Since completing the two pilots, we have received positive feedback, and our Members would like us to continue work in the emerging risk space. We are currently reviewing the two projects and with input from our Members we'll propose a refined emerging risk programme for 2017. 

If you would like more information about either project, or would like to participate in our work on emerging risk in future, please get in touch.

Download the free short version of the full report

Surveying the risk landscape: results of the 2016 emerging risk inventory pilot

Research studies

Take a look at our other operational risk research studies.