[MTE] [Mar 2025] [Lesson Learned] Decoding RBI's Operational Resilience Framework: Approaches and Challenges

Lessons Learned and the Way Forward: Strengthening Operational Resilience in Financial Institutions

Implementing operational resilience frameworks in financial institutions is about meeting regulatory compliance and building a strong, sustainable risk management culture that ensures long-term success. Through our experience in executing resilience strategies, several key lessons have emerged. These insights highlight challenges and provide a clear roadmap for organisations looking to enhance their resilience efforts.

Lessons Learned: Key Takeaways from Implementation

Leadership Endorsement is Non-Negotiable

One of the most critical factors for successful implementation is a top-down endorsement of risk management principles. Strong leadership commitment ensures that operational resilience is prioritized across the organisation.

• If the tone from the top supports resilience initiatives, half the battle is won.
  
  
• If management is not aligned or lacks consistency, objectives dilute, and efforts remain fragmented.

Lesson: Secure leadership buy-in early and ensure their continued involvement to drive cultural change.

Governance and Accountability Must Be Clearly Defined

A robust resilience framework cannot function without transparent governance and accountability. Many organisations struggle with individuals and teams avoiding responsibility, leading to delays and inefficiencies.

• Clearly define roles and responsibilities at all levels.
  
  
• Ensure accountability mechanisms are in place to prevent tasks from being neglected.

Lesson: A well-structured governance framework ensures transparency, efficiency, and execution consistency.

Decentralisation Doesn't Work – Integration is Key

Resilience efforts cannot be siloed. Risk management must be integrated across departments rather than treated as separate initiatives.

• Interdepartmental collaboration is essential.
  
  
• A centralized risk framework ensures uniformity in execution.

Lesson: Move towards an enterprise-wide, integrated approach to resilience.

Technology is Essential for Effective Execution

Operational resilience cannot rely solely on manual processes. Technology and automation are vital for seamless execution.

• Governance, Risk, and Compliance (GRC) tools should be leveraged for efficient monitoring and reporting.
  
  
• Automated systems reduce errors, enhance data accuracy, and enable real-time tracking of risks.

Lesson: Invest in technology to enable consistent execution and continuous monitoring.

Continuous Monitoring is Critical

Resilience is not a one-time project—it requires continuous improvement. Many organisations treat operational resilience as a “set-and-forget” compliance exercise.

• Regular resilience testing and review cycles should be established.
  
  
• Lessons from past incidents must inform ongoing improvements.

Lesson: Make continuous monitoring and testing a core part of your resilience strategy.

Effective Stakeholder Communication is a Must

Operational resilience efforts impact multiple stakeholders, including customers, employees, management, and regulators. Poor communication can lead to misunderstandings, resistance, and misalignment.

• A clear communication strategy should be in place.
  
  
• Different stakeholders require tailored messaging based on their roles and responsibilities.

Lesson: Strong communication fosters awareness, engagement, and smoother execution.

The Way Forward: Future Trends in Operational Resilience

Leveraging AI and Machine Learning for Advanced Resilience

Artificial Intelligence (AI) and Machine Learning (ML) are transforming resilience strategies worldwide.

• AI-driven simulations help organisations anticipate and respond to emerging threats.
  
  
• Machine learning algorithms analyze past incidents to enhance predictive capabilities.
  
  
• Continuous learning from new threats improves risk mitigation strategies.

Current Status in India: While AI and ML adoption in operational resilience is still at an early stage, it is expected to gain traction soon.

Next Step: Financial institutions should explore AI-powered risk analytics to enhance resilience.

Crisis Preparedness and Scenario Testing Will Evolve

Indian regulators do not mandate comprehensive scenario testing beyond the required compliance checks. However, global trends indicate that more rigorous resilience testing frameworks may soon become mandatory.

• In many countries, resilience testing reports are submitted to boards for review.
  
  
• Indian financial institutions should anticipate stricter requirements in the future.

Next Step: organisations should proactively enhance crisis preparedness through advanced scenario testing.

Global Standardisation of Operational Resilience Frameworks

Regulatory bodies are working towards harmonizing resilience standards across jurisdictions.

• India is likely to align its operational resilience requirements with global best practices.
  
  
• Future enhancements may include threshold standardization and greater emphasis on proactive risk identification.

Next Step: Stay ahead by benchmarking against global resilience frameworks.

Summing Up...

Operational resilience is not a one-time compliance exercise but a continuous journey.

In an increasingly complex and interconnected world, an organisation’s ability to anticipate, withstand, and recover from disruptions will determine its success. The key lies in:

• Strong leadership commitment
• Integrated risk management across functions
• Technology adoption for efficiency
• Continuous monitoring and improvement

By learning from past challenges and embracing the future of operational resilience, organisations can move beyond compliance and build a truly resilient financial ecosystem.

Dr Goh Moh Heng, President of BCM Institute, summarises this webinar. If you have any questions, please speak to the author.