Data Science for Operational Risk

Report - May 2023

In recent years, there has been a rapid acceleration in data science, particularly in advanced analytics such as machine learning. Operational risk functions are looking to harness the potential this offers.

This report is the outcome of a survey conducted among the ORX Data Science Working Group in early 2023. It explores data science initiatives that financial institutions are implementing to support operational and non-financial risk management.

Twenty-one firms took part in our survey. The results provide a snapshot of activities that explore and take advantage of the opportunities data science provides. The report is available to all members of ORX.

The report provides an overview of: 

• ONFR data science plans and initiatives 
• Examples of use cases for active and optimised risk management 
• Resources and budgets 
• Common challenges 

This is the first time we have conducted this survey, and we are planning to revisit the questions with the Data Science Working Group to provide an updated view of developments.