Guide to Implement an Operational Resilience Program

We all operate in a world which is highly complex and unpredictable. In such times, being operationally resilient is the best step any organisation can take. Achieving operational resilience is fundamentally challenging for organisations given the increasing convolution of operational processes, technology systems, people diversity and others.

Intelligent Operations in the Banking Industry

It would not be a misplaced statement to say that banks world over are under pressure to maintain a profitable bottom line. Stringent regulatory reporting and compliance requirements, a challenging market environment, and competition from fintech start-ups have squeezed profit margins for banks and have forced them to look inwards to improve operational efficiency.

Risk Management – Measure & Monitor

A firm should be prepared to manage all types of risks which has the potential to affect the critical services. It’s to be understood that the firm is bound to encounter number of risks and should leverage different risk management frameworks, as appropriate, to offer holistic and comprehensive support to the critical services.

Scenario Testing

Financial firms would be required to carry out regular scenario testing of their ability to remain within their impact tolerances for each of their critical business service. The primary objective of the testing is to better understand the systems and process and identify vulnerability that needs remediation. Additionally, the firms are required to prioritize and narrow their scenario testing appropriately to ensure an effective testing.

Impact Tolerance

Impact tolerance is defined as a firm’s tolerance for disruption to a particular business service. Setting impact tolerances for critical business services may help ensure that boards and senior management consider what the firm would do when a disruptive event occurs, rather than only trying to minimise the probability of disruption.

Mapping of Resources

The operationally resilient firm would be expected to have a comprehensive understanding and mapping of the resources and dependencies that support their business services.

Identifying Critical Business Service

Operational Resilience is about having a comprehensive understanding of the core, or critical services that an enterprise offers to its customers and that must continue to operate during a period of disruption.

Operational Resilience Resources

Covid-19 pandemic have made financial institutions realize, the need to adopt an industry recognized operational resilience framework to be able to withstand the next disruption.