Non-Financial Risk Management: Emerging stronger after Covid-19
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The confusion of Babel: What’s in the name NFR – taxonomy
Mike Finlay and Jodie Ezell
Foreword
Preface
Introduction
Introduction to Part I: The origins of non-financial risk management
The complete history of operational risk regulation (abridged)
Financial institutions and non-financial risk: Learning from the corporate approach
The painful financial side of NFR
“Risk management is about managing risk” and “It’s all about people”: Psychology might be more important than models
The confusion of Babel: What’s in the name NFR – taxonomy
Introduction to Part II: Governance of non-financial risk management
“It’s the culture, stupid”: Risk culture as the key building block of NFR management – and why some banks have come through the Covid-19 pandemic better than others
Do you know who is who? Three lines of defence in the context of NFR
Herding cats? NFR divisions as truly diverse units
“Just do it!”: Partially self-organising governance structures for NFR frameworks
Introduction to Part III: Tools and instruments for non-financial risk management
A risk by any other name: Identification, classification and agendas
Old but gold? Mastering the RCSA despite Covid-19
Biases in scenario analyses and how to mitigate them
When scenarios are not severe enough: Stress testing for non-financial risk
Ending NFR in NFR: From Excel sheets to professional IT systems for NFR management
Breaking up with risk management: Using the power of controls for good not the prevention of evil
Introduction to Part IV: Focus areas of non-financial risk management
It won’t be over after Covid-19: Pandemics and operational resilience
Dealing with IT complexity and innovation: Delivering business resilience and customer outcomes
Protecting the new gold: Information security
Conduct risk and the impact of Covid-19
From lawsuits to models: Compliance risk and financial crime
Others are doing it cheaper: But can they really? Opportunities and risks in outsourcing
Managing reputation and stakeholders
Introduction to Part V: The future of non-financial risk management
ESG risk as a new (and very important) trigger for NFR
Looking into the crystal ball: What will NFR management look like in 2030?
This time will be different: An alternative future of NFR management
Right time, right place: The drive for change in operational and non-financial risk
“But all this language gotten, and augmented by Adam and his posterity, was again lost at the tower of Babel, when by the hand of God, every man was stricken for his rebellion, with an oblivion of his former language”, The Moral and Political Works of Thomas Hobbes of Malmesbury, 1750
The biblical story of the tower of Babel is a common analogy employed to explain the use of a taxonomy at conferences, in training courses and in publications. The objective is to illustrate how data chaos can be tamed and transformed into order through a single language. However, such use obscures the actual thrust of the story – mankind sought to become a deity and as punishment lost individuality of language, resulting in a single language that no one wanted to listen to or understand.
The potential for the concept of a taxonomy to be the single language is marred by the corresponding issues of the appropriate target audience(s) neither wishing to listen nor having the ability to understand, further compounded by many different, often conflicting, needs for the taxonomy in question.
WHAT IS A TAXONOMY?
The term taxonomy is derived from ancient Greek, specifically the words τάξις or
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