[OR] [CCB] [E3] [CBS] [1] [ITo] Establish Impact Tolerances

 CBS-1 Core Deposit & Account Services

Introduction

Operational resilience requires China Construction Bank (Malaysia) Berhad (CCB Malaysia) to identify its Critical Business Services (CBS) and define impact tolerances—the maximum level of disruption to a service that the bank can tolerate before causing intolerable harm to customers, market integrity, financial stability, or breaching regulatory obligations.

For CBS-1: Core Deposit & Account Services, the bank provides fundamental banking functions, including account opening, deposit maintenance, transaction processing, payments, and foreign currency deposit services.

These services underpin customer confidence, liquidity management, and daily banking operations.

In line with regulatory expectations on operational resilience (as outlined in Bank Negara Malaysia’s Operational Resilience policy and global best practices), impact tolerances are defined using measurable metrics such as:

• Maximum Tolerable Downtime (MTD) – Maximum duration a service can be disrupted.
• Maximum Tolerable Data Loss (MTDL) – Maximum acceptable data loss measured in time (e.g., Recovery Point Objective).Customer Impact Thresholds – Number or segment of customers affected and financial exposure.
• Regulatory Impact Thresholds – Risk of regulatory breach, non-compliance, or supervisory intervention.

The following table summarises the proposed impact tolerances for each Sub-CBS under CBS-1.

Table P4: Detailed Processes for CBS-1

Key Observations

• Highest Criticality Sub-CBS:
  • 1.6 Transfer & Payment Execution
  • 1.3 Deposit Transactions Processing
    These services have the shortest MTD (1–2 hours) due to immediate liquidity and systemic implications.

• Regulatory Sensitivity Areas:
  • Account Opening (KYC/CDD compliance)
  • Dormancy Management (AML/CFT monitoring)
  • Payment Execution (Settlement obligations)
    
    
• Data Integrity Importance:
  Core transactional services require near-zero data loss (≤ 5 minutes), aligning with stringent Recovery Point Objectives (RPO).

Establishing impact tolerances for CBS-1: Core Deposit & Account Services enables China Construction Bank (Malaysia) Berhad to define clear disruption thresholds and align resilience capabilities with regulatory expectations and customer protection objectives.

The defined tolerances reflect:

• The criticality of deposit and payment services to customers and financial stability
• The regulatory obligations imposed by Bank Negara Malaysia and international banking standards
• The need for measurable, time-bound recovery objectives
• The importance of balancing operational cost with systemic risk exposure

By formalising these tolerances, CCB Malaysia strengthens its operational resilience framework, ensures proactive investment in system redundancy and disaster recovery capabilities, and enhances its ability to prevent, adapt to, respond to, and recover from severe but plausible disruptions.

Ultimately, clear impact tolerances provide a structured benchmark against which the bank can continuously test, monitor, and improve resilience—ensuring sustained delivery of critical banking services even under adverse conditions.

Building a Resilient Banking Institution: Operational Resilience Implementation at China Construction Bank (Malaysia)
eBook 3: Starting Your OR Implementation
CBS-1 Core Deposit & Account Services
CBS-1 DP	CBS-1 MD	CBS-1 MPR	CBS-1 ITo	CBS-1 SuPS	CBS-1 ST	eBook 2

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