ORX, the largest global association of operational risk professionals, today launches a world first industry-wide Risk Indicator Library for operational and non-financial risk (ONFR), developed together with global management consultancy Oliver Wyman. It is the most comprehensive global tool of its kind, built based on risk indicator data provided by over 50 financial services firms.

Its launch follows the introduction of the award-winning ORX Event Type Reference Taxonomy in 2019, the ORX Reference Cause & Impact Taxonomy in 2021, and last year, the award-winning ORX Control Library. The resource includes 370 risk indicators aligned to the 16 L1 ORX Reference Risk Taxonomy Categories, with 61 further sub-level risk categories.  

Banks and insurers can use the library to:

• Benchmark and expedite the standardisation of their internal risk indicators or risk indicator library against industry practice and inform enhancement and optimisation activities
• Provide additional guidance to the 1^st and 2^nd Line of Defence risk function specialists responsible for coordinating the internal development of risk indicators 
• Support the development of a higher proportion of forward-looking indicators focused on either inherent risk and/or on control effectiveness
• Segment risk reporting that considers whether the risk indicators are more appropriate for group/corporate level or business line management or risk function specialists

Steve Bishop, Research & Information Director at ORX comments:

“Our Risk Indicator Practices report last year showed that ONFR functions needed to optimise risk indicator practices in a number of ways. Firstly, by increasing effectiveness through data quality and the identification of predictive indicators and also with timeliness and efficiency in collection through automation. Both ultimately free up 1^st and 2^nd line capacity and better support active risk management. 

“The launch of our Reference Risk Indicator Library is the latest stage in our strategic programme to lead innovation in the global standardisation and advancement of operational and non-financial risk best practice. Our members have been instrumental in its creation and are already seeing its impact in practice.”

Tom Ivell, Partner (Financial Services) at Oliver Wyman adds:

“We’re excited to see the impact of this work with ORX to develop a robust and comprehensive risk indicator library for ONFR. Risk is an area where we learn most from each other and so having the collective data and insight from 50 financial services firms in one single resource creates an invaluable asset, and one that will continue to grow with rich data over time.”