Few organizations are using advanced technologies to manage operational risk
- Published: Tuesday, 21 May 2019 07:51
The majority (79.2 percent) of C-suite and other executives recently polled by Deloitte say that significant operational risk events impact shareholder value over the long term; yet, just 39.5 percent leverage advanced analytics to manage operational risk and only 6 percent use emerging technologies like cognitive computing and machine learning to do so. In fact, 38.9 percent of polled executives say their organizations' risk teams offer only backward-looking analyses and reports on operational risk, leveraging no advanced analytics or emerging technologies.
These results came from an online poll conducted by Deloitte amongst 955 C-suite and other executives.
The survey also found that 40 percent of executives' organizations are currently making improvements to their operational risk management programs. Another 24.4 percent plan to improve their programs in the next 12 months.
Respondents were split as to the biggest operational risk management program challenges awaiting them in the year ahead among process inefficiencies (19.3 percent), lack of adequate technologies (18.1 percent), change management concerns (17.8 percent), poor data quality (15.8 percent) and lack of predictive capabilities (10.2 percent).
According to Deloitte questions to ask of operational risk management programs include:
- How completely does the operational risk management framework cover the organization? Confirm all material risks the organization faces are captured and updated frequently. Further, procedures and controls to mitigate those risks should be kept current and tested regularly for effectiveness.
- Are emerging risks researched and identified? Some risk management programs are not forward-looking while others are too internally focused or siloed.
- Are roles, responsibilities and decision rights defined?
- Do we focus on process before IT? Leverage what already exists in your IT infrastructure.