Operational risks are generated by business activities and by operating environments. With the evolution of the financial services industry, operational risks have changed and intensified over several areas. This requires a new taxonomy of risks and for specialists in some technical or regulatory areas to manage new risks. In recent years, technological development has had a profound effect on operational risks. With the growth of digital business, and particularly online and mobile communication, data are vulnerable to many forms of cybercrime, which is now the top operational risk for the financial industry.1 Firms are facing a huge rise in the volume of data as well as changes in the way the data are handled and transmitted. Combined with stringent regulatory demands, and the consequences of non‐compliance, this poses a huge challenge for operational risk management. Regulators themselves, especially in the U.S., have started to cooperate with the private sector to understand best practice and design more appropriate legislation. They should be commended for that initiative, and I wish every country would do the same.

Technology, of course, also brings many benefits from a risk perspective. The development of data analytics, big data, artificial intelligence and machine learning enables us to better understand behaviors and provides powerful insights into the nature of risk and cause and effect. It is therefore somewhat ironic that the ...

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