Operational risk association, ORX, has today launched its Risk Indicator Library for operational and non-financial risk.

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.

The tool can also be used to provide guidance to the first and second line of defence risk function specialists responsible for coordinating the internal development of risk indicators.

ORX's library can also support the development of a higher proportion of forward-looking indicators focused on either inherent risk and/or on control effectiveness; and to segment risk reporting that considers whether the risk indicators are more appropriate for group/corporate level or business line management or risk function specialists.

Commenting on the launch, Steve Bishop, research and information director at ORX said: “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 first and second 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.”

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