Severe but Plausible Scenarios are hypothetical disruptive events that are both significant in impact and realistic enough to stress organisational resilience capabilities.
These scenarios go beyond routine incidents and are designed to assess whether a firm can deliver essential services such as securities broking and trade execution under stress conditions, consistent with regulatory expectations (e.g., Bank Negara Malaysia’s 2025 Operational Resilience Discussion Paper, which stresses the importance of maintaining critical financial services, including amid cyber and technology risks).
The table below outlines recommended scenarios for each Sub-CBS of CBS-1 Securities Broking & Trade Execution, their potential impacts, proactive risk management actions, and how they link to Cyber and ICT risks integration.
|
Sub-CBS Code |
Sub-CBS |
Severe but Plausible Scenario |
Impact / Effect |
Proactive Risk Management Action |
Link to Integration of Cyber & ICT Risks |
|
1.1 |
Client Onboarding & Order Intake |
Major outage of OMS/CRM due to a ransomware attack that corrupts the onboarding database |
Delayed client onboarding; inability to intake orders; potential regulatory and reputational loss |
Implementation of data backup strategy, multi-factor authentication, and ransomware drills |
Cyber resilience is essential; ICT asset hardening and phishing controls |
|
1.2 |
Order Validation & Pre-Trade Checks |
An incorrect market data feed was triggered by a supply chain compromise |
Invalid trades or breaches of pre-trade controls; financial exposure |
Real-time market data verification and fallbacks to secondary feeds |
Continuous monitoring of third-party feeds; ICT supply chain risk management |
|
1.3 |
Order Routing & Trade Execution |
DDoS attacks during peak market volatility |
Order routing delays, failed execution, loss of trading opportunities |
Redundant network infrastructure and DDoS mitigation services |
Integration of cybersecurity controls into trading systems |
|
1.4 |
Trade Capture & Enrichment |
Middleware failure due to a corrupted software patch |
Inaccurate trade attributes; settlement mismatches |
Strict patch testing and rollback procedures; automated reconciliation |
ICT change management and secure software deployment |
|
1.5 |
Trade Validation & Verification |
Insider threat manipulating verification processes |
Undetected mismatches; regulatory breaches |
Segregated duties, user activity monitoring, robust audit trails |
Cyber monitoring tooling and privileged access management |
|
1.6 |
Trade Confirmation & Affirmation |
Confirmation system crashed during market close |
Clients not affirmed; disputes increase; penalties from exchanges |
High-availability architecture and disaster recovery rehearsals |
Redundant ICT infrastructure and recovery procedures |
|
1.7 |
Trade Settlement Instruction & Clearing |
SWIFT or CLS connectivity failure caused by a global incident |
Deferred settlements; liquidity strain |
Alternative settlement channels; liquidity buffers; pre-settlement checks |
Integration of ICT resilience with core transaction systems |
|
1.8 |
Post-Trade Reconciliation & Exception Handling |
Reconciliation engine corrupted by data integrity attack |
Failure to detect unmatched trades; operational risk spike |
Encrypted data integrity checks; anomaly alerts; manual override |
Data integrity controls and secure reconciliation tooling |
|
1.9 |
Trade Reporting & Regulatory Compliance |
Regulatory reporting API breached; leaked data |
Compliance fines; stakeholder confidence loss |
End-to-end encryption, API security gateways, and logging |
Deep integration of cyber risk into regulatory reporting tech |
|
1.10 |
Client Settlement & Confirmation Delivery |
Client messaging platform hacked; confirmations not delivered |
Increased client complaints; litigation risk |
Multi-channel delivery verification; secure client portals |
Secure communications protocols; anti-spoofing controls |
Operational resilience for financial institutions today cannot be separated from Cyber and ICT risks, as many severe operational disruptions originate from malicious actors, software failures, or technology dependencies.
Events such as ransomware, DDoS attacks, compromised third-party services, or flawed software changes have all been observed as real-world drivers of major service disruptions across financial markets.
Institutions must embed cyber and ICT risk assessments into their operational resilience frameworks to proactively anticipate, test, and mitigate these scenariosproactively —for example, by enforcing secure coding standards, managing third-party vendor risk, and conducting regular resilience stress tests aligned with severe yet plausible scenarios.
Identifying Severe but Plausible Scenarios for CBS-1 Securities Broking & Trade Execution is central to Kenanga Investment Bank’s operational resilience planning.
These scenarios serve as a strategic lens through which risk managers can assess readiness and the capacity to withstand and recover from high-impact disruptions affecting critical business processes.
By mapping proactive risk management actions — such as enhanced cyber controls, resilient ICT architecture, comprehensive incident response plans, and redundancy strategies — Kenanga can strengthen its ability to deliver essential services within impact tolerances during adverse conditions, while also satisfying emerging regulatory expectations from frameworks like Bank Negara Malaysia’s 2025 discussion on operational resilience.
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Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey |
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| CBS-1 Securities Broking & Trade Execution | |||||
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