[BCM] [IsDB] [E1] [C9] Assessing Risks and Threats

 

Introduction

The Islamic Development Bank (IsDB) operates as a multilateral development financial institution with a mandate to foster socio-economic development across its member countries in accordance with Shariah principles.

Its operational footprint spans multiple jurisdictions, financial systems, development programmes, and stakeholder groups, including governments, financial institutions, donors, beneficiaries, and international partners.

This complex operating environment exposes IsDB to a wide range of threats and crisis scenarios that could disrupt its ability to deliver critical services.

In line with ISO 22301: Business Continuity Management Systems and ISO 22361: Crisis Management, this chapter identifies and assesses the key threat types relevant to IsDB’s business continuity management (BCM) programme and the potential crisis scenarios that may require strategic-level crisis management.

The assessment also reflects regulatory and supervisory expectations within the Kingdom of Saudi Arabia (KSA) and applicable central bank BCM policies, which emphasise operational resilience, financial stability, governance, and preparedness for severe but plausible events.

Understanding Threats and Crisis Scenarios in the IsDB Context

Within ISO-aligned frameworks, threats are potential sources of disruption that may affect people, processes, technology, facilities, information, or reputation.

Crisis scenarios, by contrast, are high-impact, low-frequency events that exceed routine incident management and require executive decision-making, coordinated communication, and stakeholder engagement.

For IsDB, threats can escalate into crises due to its systemic role, international exposure, and fiduciary responsibilities.

Types of Threats Relevant to BCM at IsDB

Strategic and Governance Threats

These threats affect IsDB’s ability to achieve its mandate and maintain confidence among member countries and stakeholders.

• Sudden changes in geopolitical relations among member countries
• Sanctions, international trade restrictions, or diplomatic disputes
• Governance failures, ethical breaches, or non-compliance with Shariah principles
• Misalignment between strategic objectives and operational capabilities

BCM relevance: Potential impact on leadership availability, decision-making continuity, and institutional credibility.

Financial and Market-Related Threats

As a development bank, IsDB is exposed to financial risks that may disrupt funding, liquidity, and investment operations.

• Liquidity stress or funding shortfalls
• Volatility in global financial markets
• Credit defaults by counterparties or beneficiaries
• Disruptions to Islamic finance instruments (e.g., Sukuk markets)

BCM relevance: Impacts critical financial operations, treasury functions, disbursements, and member country support.

Operational and Process Threats

Operational threats arise from failures in internal processes, human resources, or service delivery mechanisms.

• Loss of key personnel or skills shortages
• Breakdown of critical business processes
• Dependency on single points of failure or key service providers
• Inadequate process documentation or handover arrangements

BCM relevance: Affects the continuity of critical business functions identified through Business Impact Analysis (BIA).

Technology and Cybersecurity Threats

Digital enablement is essential to IsDB’s operations, making technology resilience a core concern within BCM.

• Cyberattacks (e.g., ransomware, data breaches, denial-of-service attacks)
• Core banking or financial system outages
• Data corruption or loss of sensitive information
• Failure of third-party IT service providers or cloud platforms

BCM relevance: Technology disruptions can have immediate cross-functional and reputational impacts.

Third-Party and Supply Chain Threats

IsDB relies on external partners, vendors, and service providers across multiple regions.

• Failure of outsourced service providers
• Disruption to correspondent banking or payment networks
• Vendor non-compliance with BCM or security requirements
• Cross-border supply chain interruptions

BCM relevance: Highlights the importance of supplier continuity, contractual resilience, and oversight.

Physical, Environmental, and Infrastructure Threats

These threats affect facilities, staff safety, and physical assets.

• Natural disasters (e.g., floods, earthquakes, extreme weather)
• Fire, power outages, or utility failures
• Restricted access to headquarters or regional offices
• Transportation and logistics disruptions

BCM relevance: Necessitates alternate site strategies, remote working capabilities, and staff safety measures.

Legal, Regulatory, and Compliance Threats

Operating across jurisdictions exposes IsDB to evolving legal and regulatory environments.

• Regulatory changes in KSA or member countries
• Non-compliance with central bank or supervisory BCM requirements
• Legal disputes or litigation
• Data protection and privacy breaches

BCM relevance: Regulatory non-compliance during disruptions can amplify operational and reputational damage.

Types of Crisis Scenarios for Crisis Management at IsDB

Based on the threats identified, the following crisis scenarios may require activation of IsDB’s crisis management framework:

1. Major Cybersecurity Crisis
   A large-scale cyber incident affecting financial systems, sensitive data, and external stakeholders.
2. Severe Financial or Liquidity Crisis
   A sudden financial shock impacting IsDB’s ability to fund operations or meet obligations.
3. Geopolitical or Sovereign Crisis
   Political instability or conflict in member countries affects projects, staff safety, or diplomatic relations.
4. Pandemic or Widespread Health Emergency
   Events impacting staff availability, travel, and on-site operations across multiple regions.
5. Reputational and Trust Crisis
   Allegations of governance failure, ethical misconduct, or Shariah non-compliance leading to loss of confidence.
6. Critical Infrastructure or Facility Loss
   Long-term unavailability of headquarters or key regional offices due to physical damage or access restrictions.

Each of these scenarios would require coordinated executive leadership,  rapid decision-making, internal and external communication, and alignment with regulatory expectations.

Alignment with ISO 22301 and Saudi Arabia (KSA) BCM Expectations

In accordance with ISO 22301, IsDB should ensure that identified threats and crisis scenarios:

• Are documented within risk assessment and BIA outputs
• Inform continuity strategies and recovery objectives
• Are regularly reviewed and tested through exercises
• Are governed under a clear BCM and crisis management structure

KSA and central bank BCM policies further emphasise operational resilience, systemic stability, management accountability, and regular stress testing against severe but plausible scenarios.

 

The Islamic Development Bank operates in a complex and risk-rich environment where a wide range of threats—strategic, financial, operational, technological, and geopolitical—can disrupt its critical functions.

Understanding these threats and translating them into realistic crisis scenarios is a foundational step in building an effective and compliant BCM and crisis management programme.

By systematically identifying and assessing these threats in accordance with ISO 22301, ISO 22361, and KSA regulatory expectations, IsDB strengthens its ability to anticipate disruptions, respond decisively to crises, and maintain stakeholder confidence.

This structured threat and crisis assessment forms the basis for developing robust continuity strategies, crisis response plans, and ongoing resilience capabilities across the organisation.

 

Building Resilience: A Guide to Business Continuity Management at IsDB
eBook 1: Understanding Your Organisation: Islamic Development Bank
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