Oliver Wyman has collaborated with the world’s largest operational risk association, ORX, to enhance a reference risk taxonomy relevant for the changing financial services industry. Together with a panel of operational risk experts from the ORX membership, the Cause and Impact Reference Taxonomy has been developed to support the understanding and use of the taxonomy.
The Cause and Impact Taxonomy allows institutions to benchmark and review their cause, event and impact taxonomies. By covering the cause-event-impact model, a more insightful view could be provided of how the operational risk taxonomy can be applied in practice by financial organisations. This is also fully compatible with the 2019 Risk Taxonomy report that was released for banks and insurance companies to utilize.
ORX and Oliver Wyman used 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. The work began in 2019 as a response to leading banks and insurance firms calling for ORX to help modernize and standardise the way operational and non-financial risk is categorised, analysed and reported.
PODCAST: Developing A New Taxonomy For Today’s Operational Risk Landscape
Luke Carrivick and Steve Bishop from ORX and Thomas Ivell from Oliver Wyman discuss the development of their recently published cause and impact taxonomy and why a new taxonomy for operational and non-financial risk was needed.