In 2026, ORX Scenarios is launching a strategic thought leadership initiative to advance the use of scenarios as a critical risk management tool. This article introduces the initiative, explains its context and importance, and sets out what our forthcoming thought leadership paper will deliver. We invite the ORX community to participate in shaping the future of scenario practice in operational and non-financial risk (ONFR) management.
Why scenarios matter now
The financial services landscape is evolving rapidly, reshaping profiles, priorities, and approaches to operational and non-financial risk. The ORX Strategic Vision for operational and non-financial risk, developed in 2024 and refined in 2025, recognises that ONFR is now closely linked to strategic goals and the capabilities required to achieve them. As firms face increasing complexity, volatility, and interconnected risks, scenario analysis is emerging as a vital tool for managing these challenges and making better informed decisions.
This initiative aims to understand where scenarios fit in ORX’s future pathway for effective ONFR management by recognising that the applications of scenario analysis now extend well beyond capital modelling. Scenarios are becoming essential for strategic risk management by enabling firms to simulate emerging threats, assess ecosystem-wide risks, and support decision-making in a fast-changing environment.
Opportunities: Strategic uses of scenarios
Discussions with leaders who contributed to the development of the ORX Vision have consistently highlighted the pivotal role that scenarios should play in driving successful ONFR management. The opportunities for leveraging scenarios extend well beyond traditional capital modelling, offering strategic value in several key areas:
- Managing complex emerging threats: Scenarios enable simulation, senior leadership understanding, and agile management of volatile interconnected risks (e.g. geopolitical events) over which firms have limited control.
- Addressing ecosystem-wide risks: By moving beyond established risk siloes, scenarios help build holistic views of risks across increasingly complex supply chains, even where firms have limited direct oversight.
- Supporting change risk management: Scenarios provide an effective means of understanding and managing the implications of rapid change, particularly where change is driven by digitisation and technological transformation.
- Evidencing risk mitigation needs: Scenario analysis can reveal weaknesses not identified by other risk routines (e.g. by helping to challenge, through discussion with control owners, the robustness of controls in extreme circumstances) and, in doing so, can help support the case for targeted investment in risk mitigation.
- Enabling resilience-focused and customer-centric testing: Scenarios facilitate horizontal testing of resilience as part of a customer-centric approach to risk management.
The different uses set out above are interconnected in different ways and to varying degrees and, taken together, form strategic components of successful ONFR management.
Challenges: Barriers limiting adoption
Our recent research, including findings from ORX’s 2024 Scenarios for Risk Management paper, shows that, despite widespread adoption of scenarios to support risk management, the industry still faces several challenges:
- Lack of clear purpose: There are both differing definitions of scenarios and limited consensus on their value as a holistic risk management tool.
- Lack of coherence: There continues to be limited firm-wide understanding of how different scenario activities interconnect.
- No common understanding of value: Uncertainty remains over the benefits and processes for integrating scenario frameworks.
- Differences in operating models: There are structural variations in operating models across the industry that hinder consistency of scenario use and practice.
- Lack of engagement: Business engagement in scenario analysis often remains low without regulatory pressure or a clear business case.
- Process complexity: The perception of scenario analysis as a resource-intensive and over-engineered process remains widespread, despite the development of more agile, streamlined approaches.
- Cultural barriers: Scenarios are often seen as labour-intensive, making it difficult to introduce or secure buy-in for more agile approaches.
Despite these challenges, there is both growing recognition of the broader management value of scenarios and a strategic opportunity to position them as a unifying tool for risk management.
Defining scenarios broadly: Building a shared understanding
A key first step in advancing scenario practice is to agree a clear, consensus-based definition of the concept of scenario. We propose the following:
This broad definition is designed to cover the range of risk management opportunities that scenario analysis offers and to provide a foundation for helping to fulfil the potential of scenarios as a uniquely well-placed tool for delivering fast and flexible simulations of key risks without the constraints of other risk processes.
Throughout 2026, this initiative will be an opportunity for ORX to engage with our community of leaders and subscribers to test, challenge, and refine this expanded definition. Testing our definition in this way will ensure that it meets the needs of the industry, supports the development of a holistic approach to scenario activity, and drives the future of scenario practice as a strategically important risk tool.
The vision: What the thought leadership paper will deliver
Our forthcoming paper will:
- Define a broad, consensus-based concept of scenarios for risk management, reflecting the industry’s diverse needs
- Articulate how scenarios can be used strategically across ONFR, moving beyond capital modelling to support decision-making, resilience and value creation
- Present solutions to current barriers and gaps (including those identified above), drawing on industry research and community input to maximise the management of scenarios
- Provide insight into the kinds of light-touch, fast-paced scenario processes required to ensure that scenarios deliver value in a timely manner
- Set out a roadmap for aligning different scenario activities and integrating them into firm-wide risk management strategies
- Link the future of scenario practice to the wider ORX Vision, ensuring alignment with industry transformation and strategic goals.
This vision will be developed in close collaboration with the ORX Scenarios community and the wider ORX Membership, ensuring it is practical, relevant and widely supported. Once developed, ORX will work to embed it into the service’s data, practice and networking activities to better serve a broad community of scenario practitioners.
As well as continuing to support scenario analysts involved in capital activity, we will then evaluate how we can support:
- Strategic risk management and horizon scanning activities
- Emerging risk management teams
- Scenario testing in operational resilience programmes
- Control owners engaged in control enhancement activity
- Tabletop exercises
How we will develop the vision
To ensure the paper reflects the needs and insights of our community, we will:
- Establish a steering committee of ORX Scenarios subscribers and leaders from the wider ORX Membership in Q1 2026
- Conduct interviews and roundtable discussions throughout the first half of the year to gather diverse perspectives from committee members
- Draft an early version of the thought leadership paper informed by these conversations
- Invite the steering committee to review and refine the draft before publication in Q3 2026
This collaborative process will ensure the final paper is robust, actionable, and representative of the industry’s best thinking.
Next steps
We invite ORX Membership leaders and ORX Scenarios subscribers to express their interest in participating in this initiative. By getting involved, you will:
- Shape ORX’s vision for the future of scenarios as a strategically important operational risk management activity
- Contribute to industry-leading discussions on the future of a key risk management tool
- Influence the future direction of the ORX Scenarios service, including its data and practice resources
To express your interest or find out more about the initiative, please contact the ORX Scenarios team.
The initiative
The 2026 ORX Scenarios Thought Leadership Initiative represents a unique opportunity to advance scenario practice and strengthen the industry’s approach to operational and non-financial risk. We look forward to working with our community to develop a shared vision and deliver practical solutions that will shape the future of risk management.
