LONDON & NEW YORK--(BUSINESS WIRE)--The world’s largest operational risk association, ORX, is collaborating with leading global management consultancy, Oliver Wyman, to enhance a reference risk taxonomy that is relevant for today’s changing financial services industry.
ORX and Oliver Wyman are using the latest analytics techniques to develop a more up-to-date reference taxonomy, pulling together taxonomies of 50+ financial institutions from across the globe into a reference view. This work began as a response to leading banks and insurance firms calling for ORX to help modernise and standardise the way operational and non-financial risk is categorised, analysed and reported.
Luke Carrivick, Head of Research and Information at ORX said: “Organisations were telling us that the operational risk landscape has evolved to the point that the event-driven Basel taxonomy wasn’t fully supporting their risk management activities. For example, the event view fails to precisely capture some of the most critical current concerns such as cyber.”
In late 2018, ORX launched its “Level 1” reference taxonomy. Oliver Wyman is supporting ORX and global financial institutions to create an updated taxonomy but going deeper to “Level 2” risks. Additionally, the work involves deep dives into certain risks, providing extra explanation into complex and topical areas such as cyber and conduct risk.
Evan Sekeris, Partner in the Financial Services practice of Oliver Wyman said: “Adapting and future-proofing this foundational element is critically important to address the realities of the current operational risk landscape which has significantly evolved since the early 2000s when the original Basel 2 taxonomy was designed.”
Commenting on the project, ORX’s Chairman, Mark Cooke, who is also Group General Manager of HSBC, said: “This is the most important structural development in operational risk management for 15 years.”
The updated reference operational risk taxonomy is set to be released for banks and insurance companies to utilise in the Autumn of 2019.
ORX Notes to Editors:
ORX is the world’s leading operational risk association for the financial sector. Through our membership, we bring together a global community of experts to enhance operational risk management in financial services. By sharing ideas, information and experience, we help the industry improve their understanding of operational risk. We’ve developed a range of solutions focused on managing and measuring operational risk, and helping organisations become less vulnerable to losses. Alongside this we run an extensive risk management and measurement research programme, and hold events around the world. ORX is a not-for-profit industry association, incorporated in Geneva, Switzerland, owned and managed by our members. We currently have 97 members institutions from more than 20 countries. For more information, please visit: https://managingrisktogether.orx.org/about. Company no. 06848757. Company registration number: CHE-109-982-492
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 60 cities across 29 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.