Great Read: The Future Of Operational Risk Management In Financial Services

While banks have made good progress in the discipline of managing operational risk, managing it remains intrinsically difficult for a number of reasons, including the required operational-risk management oversight and transparency of almost all organizational processes and business activities, along with the definitions of the roles of the operational-risk function and other oversight groups which change often. As detailed in this McKinsey article, “The Future Of Operational Risk Management In Financial Services“ (https://mck.co/3Kl3ybW) the operational-risk discipline needs to evolve in four areas to become an increasingly valuable partner to the business:


1.  The mandate needs to expand to include second-line oversight, to support operational excellence and business-process resiliency
2.  Analytics-driven issue detection and real-time risk reporting have to replace manual risk assessments
3.  Talent needs to be realigned as digitization progresses and data and analytics are rolled out: financial services organizations will need specialists to manage specific risk types such as cyber risk, fraud, and conduct risk
4.  Human-factor risks will have to be monitored and assessed—including those that relate to misconduct (such as sexual harassment) and to diversity and inclusion


Clarendon Partners is an operations consultancy that enables growing businesses to scale efficiently, reduce risk and improve strategic results through digital solutions. Our team is specialized in serving the financial services industry, offering practical solutions to growing organizations. You can learn more about Clarendon Partners at clarendonptrs.com. If you're interested in discussing your risk management challenges, please contact digital@clarendonptrs.com