[OR] [BI] [E1] [C6] Analysing Key Characteristics of Bank Islam

Chapter 6

Understanding Your Organisation – Bank Islam

Key Characteristics of Bank Islam

Bank Islam is a premier Islamic financial institution in Malaysia, established with the vision of providing Shariah-compliant banking solutions while maintaining financial stability and customer trust. As a full-fledged Islamic bank, its operations are guided not only by conventional banking principles but also by Shariah law, which informs its product offerings, risk management, and governance practices. Bank Islam operates under the regulatory oversight of Bank Negara Malaysia (BNM), ensuring that all activities comply with both national financial regulations and international standards for operational resilience.

Purpose of the Chapter

This chapter aims to provide readers with a clear understanding of Bank Islam as an organisation, with particular emphasis on the characteristics that support operational resilience. By exploring its governance structure, risk management approach, critical business functions, and organisational culture, the chapter prepares readers to appreciate how resilience is embedded into everyday operations.

The rationale for reading this chapter is to equip stakeholders, practitioners, and regulators with the context needed to understand why Bank Islam can anticipate, respond to, and recover from disruptions while maintaining compliance with Bank Negara Malaysia (BNM) requirements and global best practices such as ISO 22316.

The chapter also establishes the foundation for applying operational resilience principles across the bank. Readers are expected to learn how Bank Islam aligns its resilience strategy with both regulatory expectations and practical operational realities, including continuity planning, incident management, and adaptive practices. By the end of the chapter, readers should be able to identify the core characteristics that enable the bank to sustain critical operations during disruptions and understand the rationale behind the bank’s proactive approach to building organisational resilience.

From an operational resilience perspective, Bank Islam exhibits several key characteristics that underpin its ability to anticipate, withstand, recover from, and adapt to disruptions. These include:

1. Robust Governance and Risk Management: Bank Islam maintains a structured governance framework with clearly defined roles, accountability, and oversight mechanisms. Its enterprise risk management processes are designed to identify, assess, and mitigate operational, financial, and Shariah-compliance risks, ensuring continuity of critical banking operations.

2. Integrated Operational Resilience Practices: The bank aligns its operational resilience strategy with ISO 22316 principles, focusing on embedding resilience across all levels of the organisation. This includes the proactive identification of vulnerabilities, implementation of control measures, and continuous monitoring of key business functions to minimize service disruptions.

3. Critical Business Function Continuity: Recognising that certain operations are vital to the financial ecosystem, Bank Islam prioritises the continuity of core services, including deposit-taking, financing, payment processing, and treasury functions. Redundant systems, robust IT infrastructure, and contingency planning ensure that these functions can be maintained during unforeseen disruptions.

4. Culture of Resilience and Adaptability: Beyond formal processes, Bank Islam fosters an organisational culture that values adaptability, agility, and responsiveness. Employees are trained to respond effectively to operational challenges, and the organisation emphasises learning from past incidents to strengthen future preparedness.

5. Regulatory Alignment and Compliance: Bank Islam’s resilience framework is fully aligned with BNM’s operational resilience expectations, including requirements for business continuity management, incident reporting, and operational risk oversight. This ensures that the bank can withstand shocks while maintaining confidence among regulators, stakeholders, and customers.

By understanding these key characteristics, stakeholders gain insight into how Bank Islam integrates resilience into its strategic and operational decision-making. This foundation ensures the bank is not only compliant with regulatory expectations but also prepared to adapt and thrive in a dynamic financial environment.

This chapter provides a foundational understanding of Bank Islam’s operational environment and its approach to resilience. By highlighting the bank’s governance, risk management practices, continuity priorities, and organisational culture, it sets the stage for subsequent chapters that explore how operational resilience can be systematically implemented across all business functions.

Readers will gain a clear perspective on how Bank Islam balances regulatory compliance, Shariah principles, and global best practices to maintain continuity, protect stakeholders, and strengthen its capacity to respond to disruptions.

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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.