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Management, Practice & Framework

Report - May 2021

This report will help you understand the concepts and practice behind material risk identification programmes in the operational risk discipline in the financial industry.

Whilst the majority of regulators have a requirement for a formal material risk identification process to be in place, specific guidance and definition is somewhat limited. This report will help you understand the concepts and practice behind material risk identification programmes in the operational risk discipline in the financial industry.

The study focused on three key concepts relative to material risk identification:

  1. How organisations define materiality internally (what is the definition of material, how do firms establish what is material in terms of risk).
  2. The method firms use to identify their material risks within their organisation (who is involved, what is the process, how is it communicated, and what is the approval or validation approach).
  3. To find out what process(es) are used to determine materiality in quantitative terms.

More than 45 financial organisations headquartered in 20 different countries took part in the study, sharing information, knowledge and experience.













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Disclaimer: ORX has prepared this resource with care and attention. ORX does not accept responsibility for any errors or omissions. ORX does not warrant the accuracy of the advice, statement or recommendations in this resource. ORX shall not be liable for any loss, expense, damage or claim arising from this resource. The content of this resource does not itself constitute a contractual agreement, and ORX accepts no obligation associated with this resource except as expressly agreed in writing. ©ORX 2024


Matt Glinister

Matt Glinister

Head of Risk Management, ORX

Simon Johnson

Simon Johnson

ORX Scenarios Senior Manager, ORX

Maddy Beckett

Maddy Beckett

Research Assistant Manager, ORX


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