Scenario testing is a key component of operational resilience, designed to assess an organisation’s ability to maintain critical business services within approved impact tolerances during severe but plausible disruptions.
For Kenanga Investment Bank, scenario testing for CBS 2 Clearing & Settlement Services ensures that processes such as trade capture, settlement execution, and regulatory reporting remain robust under adverse conditions.
By simulating disruptions, the bank can evaluate recovery and response capabilities, identify vulnerabilities, and strengthen overall operational resilience, while integrating cyber and ICT risk considerations.
This chapter aims to guide readers on performing scenario testing for CBS 2 Clearing & Settlement Services at Kenanga Investment Bank. It provides recommended test scenarios for each sub-process, evaluates potential impacts, and demonstrates proactive risk management measures.
The objective is to help operational teams and management understand how to validate that critical processes can sustain service levels within impact tolerances, comply with regulatory expectations, and mitigate operational, financial, and reputational risks.
|
Sub-CBS Code |
Sub-CBS |
Recommended Scenario Test Themes |
Impact/Effect |
Evidence of Proactive Risk Management Action |
|
2.1 |
Trade Capture & Validation |
System downtime, incorrect trade entry, and data feed interruption |
Delayed trade confirmation, financial misstatements |
Automated reconciliation checks, dual-entry validation, and cyber risk monitoring |
|
2.2 |
Clearing Instructions & Netting |
Counterparty default, processing delay, system outage |
Settlement mismatch, liquidity strain |
Daily stress tests, netting simulation exercises, contingency arrangements |
|
2.3 |
Margin & Collateral Management |
Collateral shortfall, market volatility spike |
Liquidity pressure, increased credit exposure |
Margin call automation, collateral monitoring dashboards, cyber security integration |
|
2.4 |
Settlement Execution |
Payment system disruption, failed settlement |
Transaction delays, counterparty disputes |
Alternative settlement channels, exception handling protocols |
|
2.5 |
Funds & Securities Reconciliation |
Data inconsistency, processing backlog |
Misstated accounts, operational losses |
Daily reconciliation procedures, real-time monitoring tools |
|
2.6 |
Corporate Actions Processing |
Late corporate announcements, missed entitlements |
Client dissatisfaction, regulatory breach |
Automated corporate actions processing, exception alerts, and ICT risk oversight |
|
2.7 |
Exception & Fail Management |
High volume of fails, operational errors |
Backlogs, financial penalties |
Fail-tracking systems, root-cause analysis, and cross-training staff |
|
2.8 |
Regulatory & Financial Reporting |
Regulatory change, reporting system failure |
Non-compliance, fines |
Pre-testing reports, automated validation, and cyber threat assessments |
|
2.9 |
Client & Counterparty Communication |
Communication system failure, misinformation |
Client dissatisfaction, reputational damage |
Multi-channel communication platforms, scenario drills |
|
2.10 |
Technology, Controls & Monitoring |
ICT system cyberattack, monitoring failure |
Service disruption, delayed detection of errors |
Continuous monitoring, penetration testing, and integrated cyber risk controls |
Performing scenario testing for CBS 2 Clearing & Settlement Services enables Kenanga Investment Bank to identify vulnerabilities, validate resilience measures, and ensure the continuity of critical operations under severe but plausible scenarios.
By embedding proactive risk management actions and integrating cyber and ICT risks into each sub-process, the bank strengthens its ability to operate within impact tolerances, comply with regulatory expectations, and protect stakeholders.
Continuous scenario testing and lessons learned contribute to a culture of operational resilience, enhancing preparedness for future disruptions.
|
Resilience by Design: Kenanga Investment Bank’s Operational Resilience Journey |
|||||
| eBook 3: Starting Your OR Implementation |
|||||
| CBS-2 Clearing & Settlement Services | |||||
| CBS-2 DP | CBS-2 MD | CBS-2 MPR | CBS-2 ITo | CBS-2 SuPS | CBS-2 ST |
To learn more about the course and schedule, click the buttons below for the OR-300 Operational Resilience Implementer course and the OR-5000 Operational Resilience Expert Implementer course.
|
If you have any questions, click to contact us. |
||
|
|