QUESTION:  What is Operational Resilience?

Resilience is the ability of an organisation to provide critical services in any environment.

Resilience risk is the process of preparing the firm so that they have identified and understand key processes and dependencies. It is about looking at what works well and what does not.

Regulators are currently very focused on operational resilience. The expectation for Financial Market Utilities (FMUs) is that they must not have more than two hours of down time (the two-hour return to operation).

The top down approach for ensuring operational resilience is starting to evolve. The Bank of England put out a paper in the middle of last year about operational resilience and top down approach of understanding and reviewing all critical business processes.

This pandemic is the most stringent type of operational stress scenarios you could have which has tested resilience planning to the limit.

QUESTION: Who is accountable for Resilience?

The accountability for ensuring that resilience planning is effective falls to the CRO but execution comes from the first line.

Second line runs the oversight and governance, including overseeing process mapping, critical technology, challenging weaknesses and contingency plans.

First line is the real owner of the risk. The second line provides effective challenge.

QUESTION: What roles have you created or changed?

No new roles that are dedicated to resilience or resiliency risk have been created within the organisation but this is something that is evolving.

Central Clearing Counterparties (CCPs) and large banks are creating the role of Chief Resilience Officer. These are roles that sit within the first, rather than the second, line.

QUESTION: What skill sets are in demand?

Individuals that are in demand are those with the credibility of having run critical first line processes who have a very good understanding of the business.

To excel in Chief Resilience Officer roles and resilience roles more broadly people also need a very strong process risk and control mindset.

There will be more and more of a focus on resilience moving forward and those with the right mix of skills with be increasingly in demand.

QUESTION: What have you learnt from COVID-19?

The organisation’s BCM early on identified where they reach capacity and added mainframe process capacity. As a result there has been minimal disruption.

Areas that they have identified as needing improvement and that weren’t contemplated before COVID-19 include:

  • How to prevent employees who are critical to the business continuing to be effective from all getting ill at the same time.
    What signals should be put in place to indicate to the organisation that people have to start working remotely or a phased working from home process should be begun.
  • How to deal with the widespread and prolonged nature of a crisis.

Regulators will now want to see an increase in the running of various crisis scenarios. For example, prolonged outage, defaults of banks and volatility.


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Leathwaite recently executed a series of interviews with global heads of Risk to understand how organisations across all sectors have been implementing crisis plans.

Since lockdown began, organisations across all sectors have been implementing crisis plans. We were keen to understand what financial services firms globally had put in place over the last year; since regulators, particularly in the UK, began to make stipulations around process mapping, understanding of impact tolerances and running increased scenario testing.

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