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Leadership, Strategy & Advancing Op Risk

Report - February 2023

Financial institutions are in a period of transformation – especially digital transformation. At ORX, we believe that operational and non-financial risk management teams have an opportunity to step up like never before to enable this change.

In this paper, we look at the progress our members are making in moving to active and optimised risk management to better support the business in an increasingly digitalised environment. 

Read the paper to find out:

  • What progress firms have made since the pandemic
  • What challenges firms are facing
  • How they're overcoming these barriers
  • Links to other useful resources from ORX on this topic


Executive summary

Optimised and active risk management are key to helping the business achieve their goals

Our 2021 report, Future of Op Risk: Right Time, Right Place, set out two main strategies for operational and non-financial risk (ONFR) teams to support the business to transform:

  1. Optimising processes in the 1st and 2nd line of defence
  2. Greater 2nd line of defence involvement in active risk management

These two elements can eventually support each other in a virtuous circle of continuous improvement through innovation, ensuring operational and non-financial risk evolves with the business and helps drive it to new levels of performance.

Firms are on a journey to active and optimised risk management

Optimising risk management

The majority of our members have reported progress enhancing, or plans to enhance, their capabilities for optimised and active risk management. Reported progress in optimisation includes:

  • Standardisation of internal risk taxonomies and control libraries, policy sets and key process/service views
  • Making inroads into rationalisation of risk and control self assessments (RCSAs), scenarios and policies
  • Introducing greater automation into the risk indicator capture, controls, assurance, and reporting processes

Less progress has been made in some areas such as risk indicators, risk appetite, and risk culture.

Active risk management

Our members shared many examples of their increased involvement in active risk management since the coronavirus pandemic. Their experiences suggest it is easier to shift to active risk management once progress has been made with optimisation, since this provides more timely and better quality data, facilitating greater insight from the ONFR function.

Additionally, many ONFR Heads believe their teams need to be equipped with the appropriate skillsets to meet the demands of increased digitalisation and the specialist nature of emerging risks.

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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


Steve Bishop

Steve Bishop

Research and Information Director, ORX


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