Innovation starts with operational risk management

Operational risk and innovation are not often discussed in the same conversation. That’s probably because operational risk is almost an acceptable background risk, as it is always present and can never be fully mitigated. And the fact that it is all-pervasive and embedded in the way people work, means that preventative process changes can sometimes feel like attacks on people’s way of working rather than risk management. In contrast, “innovation” is all about the latest, newest and best that can be offered. Where operational risk is about stability and security, innovation’s goal is to bring in something new and different that shakes up the established way of doing things. Innovation can lead to large-scale changes at the organisational level, such as incorporating a new technology to improve efficiency, or at the level of individual traders and operators who are always looking for creative ways to improve results. At the recent ComRisk virtual conference, one panellist briefly mentioned that innovation comes from decentralising decisions. And it is this that ties operational risk and innovation closely together. Decentralising decisions If innovation comes from decentralising decisions, it is operational risk controls that make this possible. Decentralised decision-making relies on getting the right information… continue reading

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