The drive for change in operational risk
1 September 2021
About the episode
Operational and non-financial risk (ONFR) management has an opportunity to step up like never before and support financial organisations as they go through a period of rapid transformation.
To do so will mean making operational and non-financial risk resilient by using innovative technologies, which then enable risk leaders to innovate how they serve the business and actively add value. In this two-part episode of the ORX Operational Risk Podcast, Simon Wills, Luke Carrivick and Mark Cooke explore how operational risk can do this in detail.
“We're here today really to discuss change. Our view - it's not a unique view - is that financial services industry is targeting a digital transformation - so new customers, products, delivery channels, business models, competitors. And that transformation will impact the risks that our firms face and should impact how we manage those risks. And to be clear we think that the consequences of that transformation will fall most heavily into the operational and non-financial risk portfolio.”
Simon Wills, ORX Executive Director
This discussion follows the publication of a recent report that explores the future of operational risk in light of rapid digitalisation and other changes in the financial services industry. This report sets out two elements of operational and non-financial risk management – “Optimise” and “Active” – explaining how optimisation will only go so far in terms of keeping pace with the rapidly changing risk profile.
“There is a need which is primarily driven by that digitalisation that you mentioned. That changes the way that institutions operate, it changes the customer expectation. All of that adds to a risk profile that's much more rapidly moving than previously. So there's a real need to maybe do operational risk differently - do it in a different way to how we've managed it before - but on the other side there is this huge opportunity.”
Luke Carrivick, ORX Research and Information Director