[OR] [AGB] [E2] [P1 to P3] [C1] OR Planning Methodology

eBook 2: Chapter 1

Operational Resilience for Agrobank: A Structured Three-Phase Methodology

Introduction

Operational resilience is no longer a supplementary control function—it is a strategic imperative for financial institutions operating in an increasingly volatile, digital, and interconnected environment.

For Agrobank, as a development financial institution supporting Malaysia’s agriculture ecosystem, resilience is inseparable from its mandate to sustain financing access, safeguard depositors’ confidence, and maintain trust across rural and agri-based communities.

Disruptions—whether cyber incidents, technology failures, supply chain interruptions, climate-related events, or third-party breakdowns—have direct implications on financial stability and customer livelihoods.

In Malaysia, expectations have evolved significantly under regulatory guidance issued by Bank Negara Malaysia (BNM).

BNM’s operational resilience framework emphasises the ability of financial institutions to prevent, adapt, respond to, recover, and learn from disruptions, while continuing to deliver critical business services within defined impact tolerances.

Institutions are required to identify critical services, set measurable tolerance levels for disruption, conduct severe-but-plausible scenario testing, strengthen governance oversight, and continuously improve through lessons learned.

These expectations complement existing requirements under BNM’s Risk Management in Technology (RMiT), Outsourcing Policy Document, Business Continuity Management (BCM), and broader corporate governance frameworks.

Purpose of the Chapter

This chapter is designed to provide readers with a clear understanding of Agrobank’s operational resilience journey, focusing on the rationale, structure, and execution of its three-phase methodology: Plan, Implement, and Sustain.

By reading this chapter, readers will gain insight into how strategic planning, operational execution, and cultural embedding converge to strengthen resilience.

They will also understand how regulatory requirements, such as BNM’s operational resilience guidelines, are translated into measurable impact tolerances, governance frameworks, scenario testing, and continuous improvement practices.

Ultimately, the chapter prepares readers to appreciate the interconnected nature of governance, risk management, and operational readiness in sustaining a resilient banking operation.

This eBook presents a structured, three-phase Operational Resilience Planning Methodology designed specifically for Agrobank:

• Phase 1: Plan – Establishing strategic direction, governance and capability foundations.
• Phase 2: Implement – Operationalising resilience through identification, mapping, tolerance-setting and testing.
• Phase 3: Sustain – Embedding resilience into culture, performance, and independent oversight.

The objective of this introductory chapter is to clarify how these three phases translate regulatory intent into actionable execution. By the end of this chapter, readers will understand:

• Why operational resilience is a board-level responsibility.
• How BNM’s expectations shape Agrobank’s resilience journey.
• The structured pathway from framework development to measurable operational capability.
• The linkage between governance, execution discipline, and long-term institutional sustainability.

This methodology ensures that resilience is not treated as a one-off compliance exercise, but as an evolving capability aligned to Agrobank’s strategic mandate and risk appetite.

Overview of Agrobank’s Three-Phase Operational Resilience PlanningMethodology

This guide adopts a three-phase Operational Resilience Planning Methodology—Plan, Implement, and Sustain—to ensure resilience is not treated as a one-off compliance exercise, but as an embedded organisational capability.

This methodology aligns conceptually with:

• BNM’s expectations on critical business services, impact tolerance, and scenario testing
• International supervisory approaches (e.g. UK PRA, Basel principles)
• Existing BCM, risk management, and governance frameworks are commonly used by Malaysian banks

Phase 1: Plan

Objective: Establish a strong strategic and governance foundation aligned with regulatory expectations.

Stage 1: Assess Capability and Maturity

Agrobank begins by evaluating its current resilience posture across governance, technology, third-party dependencies, BCM integration, cyber preparedness, and crisis management.

This includes benchmarking against BNM’s operational resilience principles and identifying alignment gaps with RMiT and BCM requirements.

Stage 2: Analyse Gap

A structured gap analysis compares current capabilities against regulatory expectations, such as:

• Board-approved impact tolerance statements.
• Documented identification of critical business services.
• Evidence of scenario testing.
• Formalised resilience governance structures.

This stage highlights control deficiencies, documentation gaps, and capability shortfalls.

Stage 3: Develop Strategy and Roadmap

A multi-year roadmap is developed to prioritise remediation initiatives, technology enhancements, policy updates, and capability building. The roadmap integrates operational resilience with enterprise risk management, IT strategy, and digital transformation programmes.

Stage 4: Confirm Risk Appetite

Operational resilience metrics must align with Agrobank’s board-approved risk appetite. For example:

• Maximum tolerable system downtime for core financing systems.
• Acceptable data loss thresholds.
• Recovery time objectives (RTO) for critical customer-facing platforms.

BNM expects a clear articulation of impact tolerances tied to financial stability and customer harm considerations.

Stage 5: Develop and Embed Governance

Clear accountability is established at the Board, Senior Management, and Operational levels. This includes:

• Board oversight of resilience strategy.
• Management committees oversee scenario testing outcomes.
• Defined escalation protocols.
• Integration into existing governance forums.

This ensures operational resilience is embedded within enterprise governance rather than siloed within IT or BCM functions.

Phase 2: Implement

Objective: Translate strategic direction into measurable and testable operational capabilities.

Stage 1: Identify Critical Business Services

Agrobank identifies services whose disruption would cause intolerable harm to customers, the financial system, or its development mandate. Examples may include:

• Financing disbursement and repayment processing.
• Core banking transaction processing.
• Internet banking and digital channels.
• Treasury and liquidity operations.

BNM explicitly requires the identification of critical business services as the foundation of operational resilience.

Stage 2: Map Processes and Resources

Each critical service is mapped end-to-end, identifying:

• Key processes.
• Technology systems.
• Data flows.
• Third-party providers.
• Critical staff roles.
• Physical locations.

This supports compliance with RMiT and Outsourcing Policy expectations around third-party risk visibility.

Stage 3: Set Impact Tolerance

Impact tolerance statements define the maximum tolerable disruption level. For example:

• “Internet banking services shall not be unavailable for more than 4 hours.”
• “Financing disbursement processes shall not be disrupted beyond 1 business day.”

BNM expects tolerances to be measurable and customer-centric.

Stage 4: Conduct Scenario Testing

Agrobank conducts severe-but-plausible scenario testing, such as:

• Cyber ransomware attack.
• Data centre outage.
• Third-party payment gateway failure.
• Flood affecting regional branches.

Testing evaluates whether critical services remain within impact tolerances.

Stage 5: Improve Lesson Learnt

Post-incident and post-testing reviews identify improvement opportunities. Lessons learned are incorporated into policies, technology upgrades, training, and governance reporting.

Phase 3: Sustain

Objective: Institutionalise resilience as a continuous and evolving organisational capability.

Stage 1: Introduce Cultural Change

Operational resilience becomes embedded in leadership messaging, performance metrics, and management accountability. Staff recognise that resilience is everyone’s responsibility.

Stage 2: Develop Communication Strategy

Clear communication protocols are established for regulators, customers, partners, and internal stakeholders during disruptions. Transparent and timely communication supports trust and regulatory confidence.

Stage 3: Implement Training and Awareness

Regular resilience training programmes are conducted for:

• Board and senior management.
• Crisis management teams.
• Operational staff.
• Technology teams.

BNM expects senior leadership to understand and challenge resilience assumptions.

Stage 4: Provide Self-Assessment

Periodic self-assessments measure compliance with BNM’s operational resilience framework. These include independent validation of:

• Impact tolerance adherence.
• Scenario testing frequency.
• Governance effectiveness.

Stage 5: Conduct Independent Quality Review

Internal Audit or external independent reviewers evaluate the robustness of Agrobank’s operational resilience framework. Findings are reported to the Board Audit Committee to ensure independent assurance.

Operational resilience at Agrobank is not merely about surviving disruption—it is about sustaining confidence, fulfilling its developmental mandate, and protecting Malaysia’s agricultural financing ecosystem.

In an environment shaped by digital transformation, climate risk, and increasing regulatory expectations, resilience must be measurable, governed, tested, and continuously strengthened.

The three-phase methodology—Plan, Implement, Sustain—provides a structured pathway from regulatory compliance to operational excellence. It ensures that:

• Strategy aligns with BNM expectations.
• Governance reinforces accountability.
• Critical services are protected within defined tolerances.
• Testing validates readiness under severe scenarios.
• Continuous improvement becomes embedded in culture.

By moving deliberately from framework to execution, Agrobank positions itself not only to comply with regulatory standards issued by Bank Negara Malaysia, but to lead in resilience maturity among Malaysian financial institutions.

The journey does not end with documentation or initial testing. True operational resilience is demonstrated through sustained capability, proactive governance, and adaptive learning.

Through disciplined execution of this methodology, Agrobank strengthens its institutional durability, enhances stakeholder trust, and ensures uninterrupted support to Malaysia’s agricultural community—today and into the future.

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For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.