New research by Ordnance Survey among Directors and Managers of Operational Risk in the financial sector reveals that a lack of resources is, and will continue to be a problem as operational risk continues to increase in importance. Despite operational risk moving up the organisational agenda over the last year according to over 84% of respondents, only 49% believe they currently have sufficient resources to achieve their objectives. Nearly two in three (65%) say they are expecting resources to be a key issue facing their role over the coming year.
Technological developments are enabling advanced risk management, but not all are taking advantage of the full range of available tools. While two thirds of respondents (66%) regard address and location information as vital, very important or important to their organisation, only a third (35.4%) are actually utilising geographic data in their current role. Those that are taking advantage of it are using it for disaster scenarios and catastrophe modelling, fraud analysis, hotspot and pattern analysis as well as money laundering analysis and branch network management.
Sarah Adams, Insurance and Banking Sector Manager at Ordnance Survey says, “80% of operational risk managers are responsible for contingency planning, but according to our research they seriously lack the resources to support them with this important task. Real-life geographic information could help enormously, enabling managers to produce better contingency plans more efficiently.
“Our research shows that most operational risk managers do understand the importance of geographical data in risk management and those that use it see it as incredibly useful, yet two thirds of those surveyed are still not taking advantage. If they did they would find that it not only helps with regulatory compliance but can also improve overall business performance.”
Budgets are less of a concern this year with just 25% of managers finding this a key problem compared to 42% last year.
The most important aspects of operational risk over the next year will be execution delivery and process management (60%) followed by clients, products and business practice and business disruption and system failures. Other key issues facing operational risk managers over the next 12 months include management of data and systems, which has more than doubled in importance since last year from 30% to 70% as it becomes a critical focus to allow them to manage and mitigate risk more efficiently. Read More
