[MTE] [Mar 2025] [Q&A] Decoding RBI's Operational Resilience Framework: Approaches and Challenges

Operational Resilience in Financial Institutions: Questions & Answers

Operational resilience is more than just a compliance requirement—it is a strategic imperative for financial institutions.

While implementing resilience frameworks, several key lessons have emerged, offering valuable insights for organisations looking to strengthen their approach. This blog addresses some of the most pressing questions related to operational resilience and discusses the way forward.

Q1: Why is leadership endorsement crucial for operational resilience?

A: Leadership sets the tone for operational resilience. A top-down endorsement ensures that resilience initiatives are prioritized and embedded into the organization's culture.

• If leadership actively supports resilience efforts, employees take them seriously, and implementation is smoother.
• If leadership is not aligned, objectives dilute, and risk management efforts may lack direction.

🔹 Lesson: Secure leadership buy-in early and maintain ongoing engagement to drive cultural change.

Q2: What role do governance and accountability play in resilience frameworks?

A: Governance and accountability provide the structural backbone for operational resilience. Without clear responsibilities, resilience efforts can become fragmented.

• Clearly defined roles and responsibilities prevent confusion and delays.
• Strong accountability mechanisms ensure that tasks are completed effectively.

🔹 Lesson: A structured governance framework promotes transparency, efficiency, and execution consistency.

Q3: Can resilience efforts be decentralized, or do they need integration?

A: Decentralised approaches often lead to gaps and inconsistencies in risk management. To be truly effective, operational resilience must be integrated across departments.

• Collaboration between risk, compliance, IT, and business units is essential.
• A centralised risk framework ensures uniformity and alignment with organisational objectives.

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

Q4: How important is technology in operational resilience?

A: Technology is critical in enabling efficient and effective resilience frameworks.

• Governance, Risk, and Compliance (GRC) tools streamline monitoring and reporting.
• Automation reduces errors, enhances accuracy, and ensures real-time risk tracking.

🔹 Lesson: Invest in technology-driven solutions to ensure seamless execution and continuous monitoring.

Q5: Why is continuous monitoring essential for resilience?

A: Operational resilience is not a one-time project—it requires ongoing improvements.

• Regular resilience testing and review cycles help identify emerging risks.
• Past incidents should inform future strategies to improve response mechanisms.

🔹 Lesson: Implement a continuous monitoring and improvement cycle to strengthen resilience.

Q6: How can organisations improve communication with stakeholders?

A: Effective communication is key to engaging all stakeholders—customers, employees, management, and regulators.

• A clear communication strategy ensures that the right message reaches the right audience.
• Stakeholders need to understand their role in resilience efforts and what support is expected from them.

🔹 Lesson: Develop a stakeholder engagement plan to enhance awareness, alignment, and execution.

Q7: How can AI and machine learning enhance operational resilience?

A: AI and ML are transforming risk management and resilience strategies by:

• Simulating threats and disruptions to improve preparedness.
• Analysing past incidents to enhance predictive capabilities.
• Continuously learning from new risks to improve security and response strategies.

🔹 Next Step: Financial institutions should explore AI-driven analytics to enhance resilience.

Q8: Will crisis preparedness and scenario testing become mandatory in India?

A: Indian regulators do not mandate comprehensive scenario testing beyond compliance checks. However, global trends indicate that stricter resilience testing requirements may emerge.

• Many countries require resilience reports to be presented to the board.
• India is likely to adopt a similar approach in the future.

🔹 Next Step: Organisations should proactively enhance scenario testing to stay ahead of regulatory changes.

Q9: How will global standardisation impact operational resilience in India?

A: Regulatory bodies are working towards harmonising resilience standards with global best practices.

• India may align its operational resilience frameworks with global benchmarks.
• Future changes may include threshold standardisation and a greater focus on proactive risk identification.

🔹 Next Step: Stay ahead by benchmarking against international resilience frameworks.

Summing Up...

Operational resilience is not a one-time compliance exercise but a long-term commitment. In today's interconnected world, an organisation's success depends on its ability to anticipate, withstand, and recover from disruptions.

Key Takeaways:

• Leadership commitment drives resilience success.
• Governance, accountability, and integration are essential.
• Technology and automation streamline resilience efforts.
• Continuous monitoring and testing enhance preparedness.
• AI, machine learning, and global standards will shape the future of resilience.

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