The continued scrutiny that financial services brands have been faced with since 2008 clearly shows no signs of going away. New research, conducted by Ordnance Survey, in association with Operational Risk & Regulation, shows that operational risk managers could be in for another tough year
Reputational damage is expected to be the number one risk to manage in 2013, with more than 80% of respondents stating it was critical or very important in their role. However, less than 50% have responsibility for managing reputation risk, which highlights part of the problem operational risk managers are expecting to face.
Linked to reputational damage, regulatory changes have become more important over the past four years, highlighting the fact that Basel III and the Dodd-Frank Act will impact on managers’ roles over the next 12 months.
However, as resources are cited as the second key issue facing managers – in previous years it has shifted from data and systems and enterprise-wide adoption – the operational risk manager may have to prioritise risks to manage. Data and systems are stated by more than 60% as the third key issue, with most managers saying that a centralised system and better analytics would enable them to improve the value gained from customer data.
Forty-four per cent of managers use geographic analysis to enhance their operational risk, monitoring and control – a significant shift from 2008, when just one-third used geographic analysis. Most of the managers are using geographic data for fraud analysis (increased by 25% since 2011), hinting that fraud is becoming a bigger problem for operational risk managers. Over half of the managers use geographic analysis for disaster/catastrophe modelling.
Having quality customer data and getting value from it is an issue, with over half having confidence in its quality, yet most operational risk professionals are not using its to its full potential.
More on Operational Risk
HR needs to have closer ties to op risk – both would benefit
Heavy regulatory costs and fragile systems will be problems in 2015
Changing corporate culture will be hard work
Further penalty imposed for watered-down report
Sign up for Risk.net email alerts
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
Watch discussions and speakers from our North America conference
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.