[OR] [BCDB] [E2] [C2] Five Stages of the "Plan" Phase

Chapter 2

Operational Resilience Planning Methodology – The Plan Phase at Operational Resilience at BDCB

Introduction

The Plan Phase of the Brunei Darussalam Central Bank’s (BDCB) Operational Resilience Planning Methodology establishes the foundation for ensuring that the institution is capable of withstanding disruptions while safeguarding financial stability.

In this phase, BDCB sets the strategic direction for resilience by assessing its current capabilities, analysing gaps, defining its approach, and embedding governance structures that sustain resilience over time.

Each stage of the Plan Phase is interdependent—beginning with understanding existing maturity, identifying areas for improvement, and culminating in a robust governance framework that integrates resilience into the bank’s culture and decision-making.

For a central bank operating within a small but globally connected economy like Brunei, the Plan Phase is critical.

It ensures that operational resilience is not only aligned with international standards, such as the Basel frameworks, but also reflects Brunei’s unique regulatory context, including the currency interchangeability agreement with Singapore and the phased implementation of Basel III.

By systematically working through these five stages, BDCB builds the clarity and confidence required to protect its critical business services and maintain trust in Brunei’s financial system.

Stage 1: Assess Capability and Maturity

Overview:

This initial stage involves evaluating BDCB’s current operational resilience capabilities and maturity. The goal is to determine how well-equipped the bank is to anticipate, respond to, and recover from disruptions.

Implementation Summary:

• Capability assessment: Review existing frameworks—such as risk-based supervision, SupTech tools (e.g., Centralised Statistical System), stress testing mechanisms, and business continuity planning.
• Maturity benchmarking: Map maturity levels against international standards (e.g., Basel II/III, AML/CFT), internal organisational readiness, and digital resilience.

Example in Compliance with Brunei Regulatory Frameworks:

• BDCB has implemented risk-based supervision since 2016 and uses SupTech to monitor liquidity, technology, and other operational risks
• It conducts stress testing, which proved robust during COVID-19 in 2020–21
• Basel II components have been implemented, with progress toward Basel III liquidity standards
• AML/CFT frameworks have been strengthened, including updates for virtual assets oversight

Stage 2: Analyse Gap

Overview:

This stage identifies disparities between BDCB's current state and desired resilience standards, pinpointing areas for improvement.

Implementation Summary:

• Gap identification: Compare current capabilities with international best practices and evolving threats (e.g., cyber risks, climate stressors).
• Prioritisation: Rank gaps by risk exposure and regulatory urgency.

Example of Regulatory Considerations in Brunei:

• BDCB continues to phase in the Basel III Liquidity Coverage Ratio (LCR) by end-2024
• Digital and cyber-related gaps emerge amid digital payment expansion—eKYC guidelines were only introduced in July 2022
• AML/CFT enhancements, including virtual asset service provider (VASP) oversight, reflect evolving vulnerabilities

Stage 3: Develop Strategy and Roadmap

Overview:

Craft a strategic plan with clear objectives, timelines, and actions to close identified gaps and build operational resilience.

Implementation Summary:

• Outline key initiatives (e.g., Basel III compliance, digital infrastructure enhancements, stress-test improvements).
• Set milestones, assign responsibilities across BDCB units, and define resource needs.

Brunei-context Examples:

• BDCB's roadmap includes implementing Basel III liquidity measures by the end of 2024
• Development of a digital payment hub underway, integrating existing systems by end-2023
• Engagement with Regional Payment Connectivity (RPC), formalised via MOU in February 2024, supports cross-border payment resilience-

Stage 4: Confirm Risk Appetite

Overview:

Define BDCB’s tolerance levels for operational disruptions, aligning strategic resilience objectives with acceptable risk thresholds.

Implementation Summary:

• Articulate risk thresholds (e.g., acceptable downtime, liquidity buffer levels, incident recovery timeframes).
• Formalisation: Align with board-approved policies and integrate into risk appetite statements.

Regulatory Compliance Context:

• The currency board arrangement and pegged interchangeability agreement with Singapore inherently reflect a low tolerance for monetary instability.
• BDCB’s designation of Domestic Systemically Important Banks (D-SIBs) and associated extra capital buffer from 2023 denotes stricter resilience thresholds
• Macroprudential tools, including a cap on debt service ratios and LTV, indicate calibrations of acceptable credit and sector stress

Stage 5: Develop and Embed Governance

Overview:

Build organisational structures, roles, and oversight mechanisms to support, sustain, and review resilience efforts.

Implementation Summary:

• Establish governance frameworks—clear accountability, steering committees, board oversight.
• Embed resilience criteria into policies, periodic reports, and crisis exercises.
• Ensure continuous improvement via governance feedback loops.

Brunei Compliance Examples:

• BDCB employs risk-based supervision,  and SupTech encourages surveillance and governance abstraction
• Improvements in governance include clearer board-management roles, independent committees, and public disclosures
• Memoranda of Understanding (MoUs) bolster governance of cross-border supervision:
  • BDCB–MAS MoU signed Feb 2023 for banking and insurance cooperation
  • BDCB joined RPC via MOU in Feb 2024
• BDCB’s FIU signed an MoU with AUSTRAC to enhance AML/CFT governance around financial intelligence exchanges

Summary Table

Final Thoughts

By following this structured Plan Phase, BDCB aligns its operational resilience approach with evolving regulatory standards and domestic financial stability goals.

Each stage builds upon both global best practices and Brunei-specific regulatory achievements—forming a robust and context-aware resilience framework.

Summing Up …

The Plan Phase of BDCB’s Operational Resilience Planning Methodology equips the institution with a structured pathway to anticipate risks, close capability gaps, and align resilience objectives with regulatory expectations.

By progressing through the five stages—Assessing Capability and Maturity, Analysing Gaps, Developing Strategy and Roadmap, Confirming Risk Appetite, and Embedding Governance—BDCB ensures that resilience is both measurable and actionable.

This approach not only enhances the central bank’s ability to respond to disruptions but also strengthens its accountability to stakeholders, reinforces compliance with Brunei’s regulatory commitments, and ensures alignment with international standards.

Ultimately, the Plan Phase transforms operational resilience from a conceptual requirement into a practical, embedded capability—one that enables BDCB to uphold financial stability and public confidence in times of uncertainty.

	Operational Resilience at BDCB: A Strategic Implementation Guide
	ebook 2: Implementing Operational Resilience for Brunei Darussalam Central Bank
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