Businesses in the UK’s financial services sector are moving away from a compliance led approach toward operational risk, adopting instead more focused risk management and business process performance-based practices, according to Marsh, a risk management and insurance services firm.
“Many large European financial institutions have changed the direction of their operational risk projects as often as two or three times since starting their compliance efforts,” says Cristiana Bez-Safa, Managing Director in Marsh’s FINPRO Practice.
“From simply taking a narrow view, ‘what can I do to comply with Sarbanes-Oxley and Basel II?’, for example, risk managers in the financial services sector are now asking themselves how they can help improve business process efficiency, reduce operating costs and mitigate the risks that concern the Board most,” she continues.
Bez-Safa also says that among the longer-term trends in operational risk management is greater penetration and coordination of risk management across all facets of the business; more detailed scenario planning in key areas of potential exposure; and tailored risk transfer applications for operational risk.