Introduction

These days, banks must ensure that an aggregated view of risk is punctually available to all stakeholders, which further leads to greater vigilance and sensitivity to threats in ways previously unaffordable. Towards this goal, it is imperative to collect, collate and convey all risk metrics that track and present all potential hazards to senior management in a format that is easy to interpret. This purpose is served by a dashboard which, essentially, is a brief compendium of all information that managers may need in order to guide the strategic course of business.

Key Findings

• Prevalence of Operational Risk Dashboards – 84% of banks in the survey acknowledged the existence of a dashboard that summarises relevant information for senior management.

• Format – Although operational risk dashboards are prevalent, at 74% of banks that say they have them, they exist as written reports or spreadsheets, and only 26% have developed specific interactive tools. It is also notable that nearly all firms with these tools are smaller organisations.

• Duration of Use – Given the pervasiveness of written reports and spreadsheets, it is surprising to observe the extreme variation in responses shown by the survey. Understandably, banks relying on tools have largely developed them within the last two years, while no decisive trends have been observed for those that do not.

• Frequency of Reporting – As most banks do not deviate from written reports or spreadsheets, senior managers generally receive a monthly update on past performance. Banks that have developed dashboard tools, however, allow ad-hoc access to information.

• Drilling Down – The ability to explore points of interest in greater detail using dashboards is limited to a small minority of banks. At the same time, however, most respondents expressed satisfaction with the amount of detail the dashboard contains.

Conclusion

This survey illustrates that a burgeoning number of banks have introduced operational risk dashboards with the underlying format still unchanged from that of more conventional reports i.e. written reports and spreadsheets. While the benefits of interactive tools are evident to almost all firms, smaller institutions are, in general, the first to adopt them over other formats. With upgrades underway at a rapid pace, operational risk dashboards should gradually take on best practice formats featuring interactivity, real-time delivery and customisability.

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