[OR] [BI] [E1] [C5] Identifying Critical Business Services

eBook 1: Chapter 5

CBS of Bank Islam in Operational Resilience

Introduction

In an operational resilience framework, a Critical Business Service (CBS) is defined as:

A service provided by  Bank Islam — or by another person on its behalf — to one or more clients that, if disrupted, could either (a) cause intolerable harm to clients or (b) pose a risk to the soundness, stability, or resilience of the industry or markets.

Identifying CBS is essential to ensure Bank Islam can withstand, adapt to, and recover from disruptions (whether technological, operational, or external) while continuing to deliver essential services to customers and stakeholders.

Overview of Bank Islam

Bank Islam Malaysia Berhad — established in 1983 and headquartered in Kuala Lumpur — is a leading Shariah-compliant financial institution offering a comprehensive range of banking and financial services for retail, corporate, and institutional customers.

These services are aligned with Islamic banking principles, emphasising ethical financing, risk sharing, and value creation for communities.

The Bank’s offerings span retail accounts, investment products, financing solutions, digital banking, and specialised business banking services.

Purpose of the Chapter

This chapter introduces the concept of Critical Business Services (CBS) within Bank Islam’s operational resilience programme.

As operational resilience shifts the focus from internal processes to services delivered to customers and the financial system, identifying CBS is a foundational step.

For a Shariah-compliant financial institution such as Bank Islam, service disruptions can result not only in financial loss but also in customer harm, loss of confidence, regulatory concern, and systemic implications within Malaysia’s Islamic banking ecosystem.

The objective of this chapter is to enable the reader to understand what constitutes a Critical Business Service for Bank Islam, why these services are considered critical under an operational resilience framework, and how they differ from traditional business functions.

By the end of this chapter, the reader should be able to identify, articulate, and justify Bank Islam’s CBS, providing a solid basis for subsequent activities such as impact tolerance setting, resource mapping, and scenario testing.

Critical Business Services of Bank Islam

Below are the key Critical Business Services (CBS) that Bank Islam must protect and sustain to support operational resilience.

These services are essential both for the bank’s ongoing operations and for maintaining trust and stability in the Malaysian financial system.

Deposit and Savings Account Services

Description

Bank Islam provides Shariah-compliant deposit accounts, savings accounts, current accounts, and investment accounts for individual and business customers. These services are fundamental for customers’ financial management.

Operational Importance

Disruptions in deposit and savings services can threaten customers’ ability to access funds, make payments, and maintain liquidity, causing significant financial harm and reputational risk.

Operational Resilience Focus Areas

• Core banking system availability
• Secure and redundant infrastructure for transaction processing
• Continuity of ATM, branch, and digital access channels

Financing and Credit Services

Description

Bank Islam offers a range of Shariah-compliant financing products, including personal, SME, home, and commercial financing. These products support daily living, business investment, and capital expansion.

Operational Importance

Financing services are core revenue generators. Any prolonged service disruption (e.g., inability to process loan applications, disbursements, or repayments) can impact customers’ financial planning and the bank’s credit operations.

Operational Resilience Focus Areas

• End-to-end loan origination and servicing systems
• Data integrity and recovery solutions
• Risk management and compliance integration

Payments and Funds Transfer

Description

Critical retail and corporate payment services include funds transfers, bill payments, QR payments, and digital wallet services offered through platforms such as BIMB Mobile, BIMB Web, and digital banking apps.

Operational Importance

Payments and fund transfers are high-volume, real-time services. Their disruption directly affects daily financial activities and can lead to systemic consequences if prolonged (e.g., inability to settle obligations or pay suppliers).

Operational Resilience Focus Areas

• 24/7 availability of electronic payment systems
• Integration with national payment infrastructure (e.g., DuitNow)
• Real-time monitoring and fraud controls

Digital Banking Platforms

Description

Bank Islam’s digital channels — such as Be U by Bank Islam, its cloud-native digital banking app, digital onboarding, and self-service platforms — deliver core banking functions to customers without requiring in-branch visits.

Operational Importance

Digital banking has become central for customer engagement and transaction processing. Failure of these platforms can significantly disrupt service delivery and customer access.

Operational Resilience Focus Areas

• Cloud infrastructure resilience and redundancy
• Cybersecurity and threat detection
• Automated failover and disaster recovery solutions

Business and Corporate Banking Services

Description

Corporate services include business accounts, merchant services, trade finance, and financing tailored for enterprises (e.g., SME solutions through BIMB Biz and other business-focused offerings).

Operational Importance

Corporate clients depend on uninterrupted banking services to manage working capital, payments, payroll, and trade operations. Disruptions can materially impact not only the bank but also the broader economy.

Operational Resilience Focus Areas

• Robust network and transactional systems
• Business continuity planning for high-value operations
• Comprehensive service level agreements with third parties

Treasury and Liquidity Management

Description

Treasury activities — including asset-liability management, investment portfolio management, and liquidity provisioning — are central to maintaining financial stability.

Operational Importance

Treasury functions sustain the Bank’s market operations and regulatory compliance. A failure to manage liquidity or investment activity could endanger the bank’s financial position, market confidence, and regulatory standing.

Operational Resilience Focus Areas

• Real-time risk and exposure monitoring
• Secure and high-availability treasury systems
• Integration with risk and compliance frameworks

Regulatory Reporting and Compliance

Description

Bank Islam must meet regulatory reporting requirements relating to financial reporting, Shariah compliance, risk management, and anti-money laundering (AML) practices.

Operational Importance

Regular reporting and compliance activities ensure legal standing, market trust, and adherence to Islamic finance principles. Disruption or data inaccuracies can result in regulatory penalties and reputational harm.

Operational Resilience Focus Areas

• Automated compliance workflows
• Data governance and audit trails
• Regulatory change management

Table: Critical Business Services (CBS) of Bank Islam

Identifying Critical Business Services is a cornerstone of Bank Islam’s operational resilience programme, ensuring that the bank focuses its resilience efforts on what truly matters to customers, regulators, and the financial system.

Unlike traditional business continuity approaches that prioritise internal functions, CBS identification reframes resilience around service continuity and preventing customer harm.

By clearly defining its Critical Business Services, Bank Islam establishes a strong foundation for setting impact tolerances, mapping critical business services to people, processes, technology, facilities, and third parties, and conducting severe-but-plausible disruption testing.

This chapter, therefore, serves as a critical bridge between strategic intent and the implementation of practical resilience, enabling Bank Islam to strengthen trust, comply with regulatory expectations, and sustain service delivery during disruptions.

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Implementing Operational Resilience for Bank Islam: Aligning with BNM and Global Best Practices
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