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Leadership, Strategy & Advancing Op Risk

Report - November 2024

Over the past 10 years, financial services have undergone a transformation that has brought together, at speed, new digital technologies, business models, service offerings and partnerships. 


To help the financial services industry understand the consequence of this transformation for operational and non-financial risk (ONFR), we are exploring whether the business transformation has affected ONFR profiles and priorities to the extent that firms need to fundamentally change how they manage ONFR.

We engaged with approximately 50 CROs and other senior risk leaders from our membership, asking them:

  • Whether ONFR is increasing
  • Whether and how ONFR is changing
  • Whether ONFR management needs to change
  • What successful ONFR management will look like in the future

We've drawn the results into a complimentary report which sets out our strategic vision for the future of ONFR. This report captures the spirit of those conversations. It delves into the characteristics of successful risk management, provides a path forward for ONFR and highlights essential new capabilities and insights. 

Listen for highlights from the report

For an overview on the report listen to the podcast episode on Our vision for the future of operational and non-financial risk in financial services

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Our strategic vision for operational and non-financial risk

iStock-1341688106-1The leaders we spoke to for this report came from small firms and large, from banks and insurers, and from Europe, America, Asia, Australia and Africa. They were a diverse group. Yet the messages we heard were strikingly consistent and emphatic, and echoed the changes in both the business and ONFR transformation.

Every single risk leader was aware of the challenge and was responding in some way. The consistent view was that to successfully balance risk and reward, ONFR needed to match the speed and scale of the digital business. It must support the business to deliver change safely, look ahead to emerging risks, and connect the dots to offer a whole assessment of risk.

Synthesising all our conversations, we have drawn up a vision statement for the value that ONFR can contribute to the success of firms.

“In the future, successful  financial services firms will be those that manage ONFR confidently and dynamically, balancing risk and reward in order to mitigate loss, protect customers and reputation, deliver change and achieve their strategic objectives.”

Our strategic vision for operational and non-financial risk

What does the vision mean for ONFR?

Watch Simon Wills, ORX Senior Board Advisor, explain the new vision for operational and non-financial risk following discussions with risk leaders at ORX's LeadersConnect Live 2024.

The key steps to success

Risk leaders are already taking steps towards making the vision a reality, and a common path forward is starting to emerge.


Working-together-Navy-cyanLaying foundations fit for the future

First, leaders are creating foundations that are fit  for purpose, which are an essential precursor to digitalisation:

Governance

Coordinate activity across a growing set of 2LOD functions to develop single ONFR view.

Culture

Develop positive risk culture, balancing risk and reward.

Skills

Upskill team by adding digital & business skills to existing risk base

Framework & tools

Balance simplicity with flexibility and consistency. Find sweet spot where frameworks & tools are easy to use but are robust enough to manage risk appropriately


Data-Navy-cyanDigital core

Then they are building a new digital core for risk to match the digitalisation taking place in the business, embedding data-driven risk management of core business at speed and at scale


Leadership-Navy-cyan

New capabilities and insights

And finally, they are creating new risk capabilities and new risk insights:

Outside in

Expand the scope of data collected from ecosystem and environment.

Change

Increase resources and capabilities in change management.

Emerging risk

Improve sight of emerging risks and ability to respond rapidly.

See the whole

Have a balanced prioritisation based on whole impact, particularly reputation.

Connect the dots

Break down the barriers and develop a single view of risk to the business.

Download the full report for free to learn more about the pathway to success and to discover ORX's vision for the future of ONFR.

 

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Interested in reading more about our vision for ONFR?

If your firm is a member of ORX, log in or register to read this resource.

Log into the ORX website

Register for an account

Not an ORX member? You can download a complimentary copy of this paper.

Download the white paper

Find out more about ORX Membership

 

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About ORX Membership

ORX Membership is an ever-expanding global community, sharing knowledge, expertise and experience within ONFR. We provide loss data and support for the banking, insurance and asset management industries. Members get access to an extensive library of resources, including reports, benchmarks and industry standards and libraries.

Through ORX Membership you can:

  • Join our virtual communities of operational risk professionals
  • Take part in research projects and benchmark studies with your peera
  • Attend one of our many events to network with leaders in the industry

    Find out more about ORX Membership

 


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


Contacts:

Luke Carrivick

Luke Carrivick

Executive Director, ORX

Simon Wills

Simon Wills

Senior Board Advisor, ORX

Steve Bishop

Steve Bishop

Research and Information Director, ORX

Roland Kennett

Roland Kennett

Membership Director, ORX