The power of a common language: Integrating the ORX Reference Taxonomy into loss data

Early insights from the first Agora data cycle

What the enhanced data reveals about the true drivers of operational and non-financial risk

As part of the move to Agora, ORX introduced the ORX Operational Risk Reference Taxonomy into the banking and insurance loss data exchanges. This establishes a common, contemporary risk language that strengthens comparability, enables deeper analytics and supports earlier identification of industry‑wide risk patterns.

This marks a major milestone for the ORX community. It reflects a collective commitment by our members to adopt a shared and modernised risk language and apply it consistently in loss data reporting. We would like to thank all of our members who invested time in mapping events and submitting data using the new structure. This engagement is critical to delivering meaningful, comparable insight at an industry level.

With the first Agora cycle successfully completed, we're already starting to see early patterns emerging. Although the data is still partial, it already illustrates an important point:

Many material risks, such as third party, only become visible when events are classified beyond the surface level, using Level 2 classifications and Risk Theme flags in line with ORX guidance.

This blog explores how a contemporary risk language, applied consistently across an industry view of loss data, can support deeper and more timely insight into operational risks. We've also included a short case study exploring third party.

What is the ORX Operational Risk Reference Taxonomy?

The ORX Reference Taxonomy is an industry reference taxonomy for operational and non-financial risks. It is made up of two connected components. The first is an Event Type Taxonomy, covering level 1 and level 2 classifications. And the second is a Cause and Impact Taxonomy that supports a clearer understanding of why an event happened and the drivers behind it. Together, they help describe not only what occurred, but also the underlying pathways through which losses materialise.

We collaborated with Oliver Wyman to develop the taxonomy as a common reference point for the industry. Over time, many financial firms have evolved beyond the legacy Basel event types, and the industry has seen increasing divergence in how risks are categorised. Our taxonomy helps reduce that divergence by reflecting current industry practice and providing a consistent language for analysing and discussing risk.

Embedding the taxonomy into the banking and insurance loss data reporting as part of our move to Agora marks a turning point for the industry. It enables a more structured approach to categorising loss events, improves comparability across ORX datasets and strengthens the foundation for enhanced analytics and more meaningful benchmarking of risks that matter most – including information security, third-party exposures and financial crime.