Operational risk is a topic that has seen a significant rise in the amount on “online chatter”, particularly since early 2000. Some interesting statistics are presented in this infographic on operational risk, not the least is the amount of postings on operational risk represents no more than 10% of the amount of postings on the internet for the iPod since 2000! Of course, we appreciate that the iPod has perhaps a broader popularity base, but it is still an interesting observation to consider.
Of the analysis of the statistics of the number of times the words of the Basel II operational risk categories appear, it is not unexpected that every single one has seen a rise since the late 1990s (given this is when the internet started). However, there are some interesting trends that do begin to appear when you consider the data.
In particular, the steady increase in internal fraud compared to external fraud (which has even seen a decline in the last few years). Damage to physical assets has clearly been a topic for many years but again it is the decline in the last few years that is interesting. One would suspect if we played dollar impact against this chart we would see an increase in total dollars.
And finally consider the spike in the late 1990s for business disruption and systems failure. Without having delved deeper at this stage it would be interesting to see how this aligns to the post-tech bubble burst.
This type of analysis is the next phase for risk managers where the value can really be shown in presenting to the business some observations using external data that enable the business to better consider and manage their risks.
This is just the tip of the iceberg on this type of analysis and we are constantly looking at how TheInnovationofRisk.com can help organisations achieve this type of analysis for their organisations.
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