On 9 March we were joined by 70 representatives from almost 50 of our member firms for a virtual roundtable to discuss the operational risk impacts of the war in Ukraine. Read on for an overview of the main themes from the session.
Key discussion points
The effect of the conflict on our members varies depending on the size of their operations and their wider exposure to the countries. Many are therefore considering the secondary impacts, both on clients and internationally, the emerging risks of the conflict and managing reputational implications. Firms are aware of the financial and credit risk implications of the conflict, and we'll continue to provide support as the operational risk effects continue to unfold and evolve.
Key themes
1. Operations
Firms with operations and entities in the region are experiencing a range of adverse effects from the conflict, including those related to risks such as physical safety and security, business continuity and technology.
2. People
Firms are trying to ensure employees and their families in the region are safe and feel supported during the crisis.
3. Financial crime – sanctions
Sanctions are a key focus for members globally, especially when facing the challenge of how to correctly apply sanctions rules in different jurisdictions.
4. Information security (including cyber)
As the information security landscape evolves and cyber risk persists, members are devoting significant resources in this area, along with monitoring the wider geopolitical implications.
5. Social expectation and reputational risk
Stakeholders have high expectations of firms in their response to the crisis, and firms need to ensure they handle the situation sensitively.
6. Longer-term impacts
Much like the coronavirus pandemic, the crisis in Ukraine is fluid, and we are still in the early stages. Firms are trying to consider what could happen as the situation evolves.
7. Risk quantification and stress testing
While there is a greater focus on financial risk, firms are also working to assess any impact to risk quantification programmes.
Next steps
We will continue to facilitate focused sessions for our members to discuss the situation, with a second roundtable being held for our members in March. Some of our working groups are also offering focused discussions linked to the topics outlined above, and updates from those will be shared with the wider ORX membership.
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