Report

The drive towards digital ONFR management

An update on the industry’s direction of travel

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Report - December 2024

This report explores how financial institutions are embracing digitalisation to enhance operational and non-financial risk (ONFR) management.

It highlights the progress being made in adopting data-driven approaches and advanced technologies, such as machine learning and genAI, to support financial institutions in managing risks effectively and safely at the speed required in today’s digital landscape.

The report focuses on two key areas:

Data Science: Leveraging advanced analytics, including machine learning and (generative) AI, to create a holistic view of risks.
Risk Management: Developing risk management tooling to support new digital capabilities.

These insights are informed by discussions and surveys with the Data Science Working Group and Risk Management Working Group, offering a clear view of the steps financial institutions are taking to build a robust digital core for future risk management.

Digital transformation is reshaping the financial services industry, and operational and non-financial risk (ONFR) teams are evolving to keep pace. Effective ONFR management has become essential for enabling businesses to transform safely while keeping pace with the demands of digitalisation. Advanced analytics, including machine learning and generative AI, are unlocking new possibilities, providing deeper insights and predictive capabilities to empower proactive risk management.

Recognising this shift, our Strategic vision for operational & non-financial risk explored how financial institutions are embedding data-driven risk management practices to support their businesses at the speed and scale digitalisation demands. Building on these insights, this report revisits the strategic priorities outlined in Data Science for Operational Risk. It reflects the industry’s increasing reliance on data, technology, and advanced analytics to ensure safe and accelerated transformation in a rapidly evolving digital landscape.

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