# Banks and insurers right to prioritise technical skills in operational risk but must not overlook training in nurturing talent   Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-05-23 Category: INSURANCE Category URL: https://financedigest.com/category/insurance Meta Title: Insights from ORX People Capability Survey: Prioritising Meta Description: Discover key insights from the ORX People Capability Survey study on how banks and insurers are adapting to the changing landscape of operational risk through URL: https://financedigest.com/banks-and-insurers-right-to-prioritise-technical-skills-in-operational-risk-but-must-not-overlook-training-in-nurturing-talenthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/easing-the-burden-1-1736838315082-compressed.jpg) _By **Roland Kennett,** Director of Membership at ORX_ Our recent ORX People Capability Survey study of global financial institutions asked banks and insurers probing questions on how they currently approach and prioritise people development in the area of operational risk.  The results highlighted what we might expect, or at least hope, that banks and insurers are increasingly recognising the importance of people power and mapping skills and knowledge requirements for operational risk across their firm. Reassuringly, 34% said that people development frameworks are mature and 49% said that these are currently in development. There can be no doubt that the Covid-19 pandemic will have had an influence on these recent figures, with [operational risk](https://www.financedigest.com/mitigating-operational-risk-through-centralising-reconciliation.html "MITIGATING OPERATIONAL RISK THROUGH CENTRALISING RECONCILIATION") having taken centre stage to help finance firms navigate the societal changes and economic uncertainties over the past year. The survey found that over a third (36%) of firms increased their [focus on the importance of prioritising people development in operational risk](https://www.financedigest.com/pizza-group-dp-eurasia-sharpens-turkish-focus-as-russia-risk-high.html "Pizza group DP Eurasia sharpens Turkish focus as Russia risk high") in the last year as a result of Covid-19. However, whilst banks may be committed to having sophisticated frameworks in place for people and [skills development](https://www.financedigest.com/what-skills-and-areas-of-knowledge-should-finance-teams-develop-during-2023.html "What Skills and Areas of Knowledge Should Finance Teams Develop During 2023? "), less than a quarter (24%) polled were satisfied with the training available across the industry – vital to close any skills gaps and bring new talent into the industry. Here are some of the insights taken from this [year’s benchmark report:](https://www.financedigest.com/equity-markets-show-strong-end-of-year-performance-in-camradatas-q4-2017-investment-research-reports.html "Equity Markets Show Strong End of Year Performance in CAMRADATA’s Q4 2017 Investment Research Reports") **Firms are prioritising** [digital skills](https://www.financedigest.com/utilising-digital-tools-to-close-the-finance-and-accounting-skills-gap.html "Utilising digital tools to close the finance and accounting skills gap") With the speed of digital transformation, it’s no surprise to see the acquisition of digital skills as the number one [priority in this year’s](https://www.financedigest.com/2017-cfo-outlook-top-priorities-as-new-year-gets-underway.html "2017 CFO Outlook: Top Priorities as New Year Gets Underway") survey results. Digital transformation represents a structural change for the financial industry – it is both creating new challenges for operational [risk management](https://www.financedigest.com/strategies-banks-use-to-manage-liquidity-risk.html "Strategies Banks Use to Manage Liquidity Risk"), and promising new techniques to understand and control risk better. Operational risk has a [real opportunity to innovate in how it works](https://www.financedigest.com/get-real-how-to-be-your-authentic-self-at-work.html "Get real: How to be your authentic self at work") and what it offers, and technology has a vital role to play. It is good to see therefore that [top of the list](https://www.financedigest.com/the-secret-to-academic-success-colouring-in-oxford-and-cambridge-residents-top-the-list-of-crayon-wielding-adults.html "The secret to academic success? Colouring in! Oxford and Cambridge residents top the list of crayon wielding adults") of skills priorities for financial firms in 2021 are digital (68.6%), resilience (54.9%) and emerging risks (54.9%). These are of course tied together by technology which also plays a significant role in new innovation and processes in tackling [resilience and emerging risks](https://www.financedigest.com/heineken-sees-europe-resilience-offseting-asia-slowdown-risk.html "Heineken sees Europe resilience offseting Asia slowdown risk"). ![Roland Kennett](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/roland-kennett-450x493-1736838315115-compressed.jpg) Roland Kennett And this also links directly to where we are [seeing the greatest innovations](https://www.financedigest.com/the-next-upcoming-years-to-see-the-aesthetic-lasers-and-energy-devices-market-get-through-the-best-of-both-innovation-and-inquisition.html "The Next Upcoming Years To See The Aesthetic Lasers And Energy Devices Market Get Through The Best Of Both – Innovation And Inquisition"). Notable impacts are seen in areas where technology plays a significant role, such as the automation of control, [detection for fraud](https://www.financedigest.com/the-clues-to-detecting-fraud-are-hidden-in-relationships.html "THE CLUES TO DETECTING FRAUD ARE HIDDEN IN RELATIONSHIPS"), conduct, cyber, anti-money laundering, and financial crime. Digitalisation and the [pandemic have also highlighted a need](https://www.financedigest.com/re-mortgaging-your-home-in-the-middle-of-a-pandemic-what-you-need-to-know.html "Re-Mortgaging Your Home In The Middle Of A Pandemic: What You Need To Know") for the relevant subject matter expertise. Information security (74.5%), technology (62.7%) and third-party ( [64.7%) risks are the top three priorities for subject matter expertise](https://www.financedigest.com/jaywing-releases-horizon-a-new-ifrs-9-modelling-solution-that-encapsulates-its-extensive-credit-risk-expertise.html "Jaywing releases Horizon, a new IFRS 9 modelling solution that encapsulates its extensive credit risk expertise") development. [Data management and business](https://www.financedigest.com/big-data-lowers-insurance-premiums-and-optimises-business-performance.html "Big Data Lowers Insurance Premiums and Optimises Business Performance") continuity are also a focus, but conduct risk is surprisingly low down on the priority list. **Softer skills not underestimated to support active** [risk management](https://www.financedigest.com/improving-risk-management-in-the-insurance-industry.html "Improving risk management in the insurance industry") It’s often the case that some of the softer skills get overlooked for more ‘practical’ and seemingly more immediate skill sets. But it is good to see that [banks and insurers](https://www.financedigest.com/swiss-regulator-monitoring-banks-and-insurers-after-svb-collapse.html "Swiss regulator monitoring banks and insurers after SVB collapse") recognise that more communication and creative skills are also crucial. Best practice in collaboration and influencing, alongside innovation, must underpin all effective operational risk functions and the [survey revealed](https://www.financedigest.com/retailers-weighed-down-by-their-own-legacy-systems-survey-reveals.html "Retailers Weighed Down by their own Legacy Systems, survey reveals") that influencing (62.7%), collaboration (56.9%) and innovation (49%) are the top three soft skill priorities for 2021. [Insurers are particularly investing](https://www.financedigest.com/classic-car-insurance-broker-launches-future-classic-investment-guide.html "Classic car insurance broker launches Future Classic investment guide") in uplifting operational risk influencing skills, suggesting that the operational risk function’s internal profile is perhaps lower than in banks. **[Sophisticated people power frameworks must](https://www.financedigest.com/life-post-brexit-people-must-take-precedent.html "Life post Brexit – people must take precedent") not overlook operational risk training** More than half of [survey respondents currently map skill requirements to risk](https://www.financedigest.com/euro-zone-economy-faces-growing-risk-of-recession-survey-shows.html "Euro zone economy faces growing risk of recession, survey shows") roles. A further third consider their practice in this space to be mature, e.g., by defining [skill proficiency levels and knowledge requirements](https://www.financedigest.com/lack-of-collaboration-and-skills-shortage-is-limiting-organisations-ability-to-meet-ifrs-9-requirements.html "Lack of collaboration and skills shortage is limiting organisations’ ability to meet IFRS 9 requirements"). However, 2LOD (Second line of defence) people development is primarily done via self-directed learning and on the job experience, supplemented by external training. As mentioned at the start of the article, less than a quarter (24%) are satisfied with [current market](https://www.financedigest.com/dry-ice-market-2015-outlook-current-and-future-industry-landscape-analysis-2025.html "Dry Ice Market 2015 Outlook, Current and Future Industry Landscape Analysis 2025") provision, which is not acceptable to them. This survey is a benchmark on people and skills development in operational [risk across the financial industry](https://www.financedigest.com/amid-evolving-cyber-risks-aon-introduces-first-of-its-kind-enterprise-wide-cyber-solution-for-all-industries.html "Amid Evolving Cyber Risks, Aon Introduces First-Of-Its-Kind Enterprise-Wide Cyber Solution For All Industries"). Without the right skills in [financial services](https://www.financedigest.com/how-financial-services-leaders-can-prioritise-cybersecurity-investment.html "How financial services leaders can prioritise cybersecurity investment") firms, they can’t possibly reach their potential and drive innovation. With the current pace of change, we need to make sure that [financial institutions have the right skills and training](https://www.financedigest.com/mazars-to-acquire-financial-modelling-consultancy-and-training-provider-corality-financial-group.html "Mazars to acquire financial modelling consultancy and training provider, Corality Financial Group") programmes that reflect industry priorities, both now and for the future. **[Innovation and Human](https://www.financedigest.com/customized-innovation-to-drive-the-human-microbiome-market.html "Customized innovation to drive the Human Microbiome Market") Capital** It is good to [see that ensuring risk](https://www.financedigest.com/wto-sees-subpar-2023-trade-growth-with-multiple-risks.html "WTO sees “subpar” 2023 trade growth with multiple risks") teams have the right talent is a key priority for many firms. The pandemic has certainly shone a light on the importance of not only having the right operational risk processes in place, but also having talented people on board to [implement and drive](https://www.financedigest.com/how-cloud-is-driving-forward-implementation-of-zero-trust-security.html "How Cloud is Driving Forward Implementation of Zero Trust Security") further innovation. But it’s clear that the provision of dedicated and specific training needs to be a [key focus to ensure that employees](https://www.financedigest.com/5-key-things-you-need-to-know-before-hiring-your-first-employee.html "5 Key Things You Need to Know Before Hiring Your First Employee") get the skills they need to do their job well and that talent continues to thrive. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---