Operational resilience refers to an organisation’s ability to anticipate, prepare for, respond to, and adapt to operational disruptions while maintaining continuous business operations.
To achieve this, organisations need a well-defined strategy roadmap that outlines the steps to build and sustain resilience.
This article is supplemented by examples from financial institutions (FIs). FIs operate in a highly regulated and risk-prone environment, prioritising operational resilience.
Below, we explore the key steps to developing an operational resilience strategy roadmap and examples from the financial sector to illustrate how each step can be applied in practice.
The first step in developing an operational resilience strategy roadmap is identifying and understanding your organisation's challenges. These challenges may include:
External Threats: Cybersecurity risks, supply chain disruptions, regulatory changes, and natural disasters.
Internal Vulnerabilities: Outdated technology, lack of employee training, insufficient risk management processes, or siloed operations.
Business-Specific Risks: Industry-specific risks, such as financial volatility for banks or data breaches for tech companies.
Financial institutions face unique challenges that can disrupt operations. Examples include:
Cybersecurity Threats: A major bank experiences a ransomware attack that encrypts critical customer data, halting online banking services.
Regulatory Changes: New data privacy regulations require significant changes to storing and processing customer information.
Third-Party Risks: A payment processing vendor suffers a system outage, impacting the bank’s ability to process transactions.
Market Volatility: Sudden economic downturns lead to increased customer withdrawals, straining liquidity management systems.
By laying out these challenges, organizations can clearly understand the potential threats to their operations and prioritize areas that require immediate attention.
Once the challenges are identified, the next step is to set clear and measurable objectives for operational resilience. These objectives should align with the organization’s overall business goals and risk appetite. Examples of objectives include:
Minimizing downtime during disruptions.
Ensuring compliance with regulatory requirements.
Enhancing customer trust by maintaining service continuity.
Building a culture of resilience across the organization.
Financial institutions set clear objectives to guide their resilience efforts. Examples include:
Minimizing Downtime: Ensure critical systems, such as online banking and payment processing, are restored within 2 hours of a disruption.
Regulatory Compliance: Achieve full compliance with new data privacy regulations within 6 months.
Customer Trust: Maintain 99.9% service availability during peak trading periods.
Employee Preparedness: Train 100% of staff on incident response protocols within the following year.
Objectives should be specific, time-bound, and achievable, providing a clear direction for the strategy. These FI objectives offer a clear direction for building resilience.
With objectives in place, organizations must assess their current capabilities to achieve operational resilience. This involves evaluating:
People: Do employees have the necessary skills and training to respond to disruptions?
Processes: Are existing processes robust enough to handle crises?
Technology: Is the technology infrastructure capable of supporting resilience efforts?
Data: Is critical data protected and easily recoverable in case of a breach or loss?
Financial institutions assess their current capabilities to identify gaps. Examples include:
People: A bank discovers that only 30% of its employees have completed cybersecurity training, leaving the organization vulnerable to phishing attacks.
Processes: A review reveals that the incident response plan has not been updated in 3 years and does not account for new threats like ransomware.
Technology: An assessment shows that legacy systems are incompatible with modern cloud-based disaster recovery solutions.
Data: A financial institution realizes customer data backups are not encrypted, posing a compliance risk.
A capability assessment helps identify gaps and areas for improvement, forming the foundation for the next steps. These FI examples on the capability assessment help prioritize areas for improvement.
Based on the capability assessment, organizations can determine the courses of action required to address gaps and enhance resilience. These actions may include:
Risk Mitigation: Implementing controls to reduce the likelihood or impact of disruptions.
Incident Response Planning: Developing and testing response plans for various scenarios.
Resource Allocation: Investing in technology, training, or partnerships to strengthen resilience.
Stakeholder Engagement: Collaborating with suppliers, customers, and regulators to ensure alignment.
Based on the capability assessment, financial institutions define specific actions. Examples include:
Risk Mitigation: To reduce the risk of unauthorized access, implement multi-factor authentication (MFA) for all customer accounts.
Incident Response Planning: Develop a playbook for responding to ransomware attacks, including communication protocols and recovery steps.
Resource Allocation: Invest in a cloud-based disaster recovery solution to ensure the rapid restoration of critical systems.
Stakeholder Engagement: Collaborate with regulators to ensure compliance with new data privacy laws and with vendors to improve third-party risk management.
Each course of action should be tailored to the organisation’s specific needs and risks. The FIs' actions address identified gaps and enhance resilience.
With the courses of action defined, the next step is to formulate specific initiatives to operationalize the strategy. These initiatives should be actionable, measurable, and time-bound. Examples include:
Launching a cybersecurity awareness program for employees.
Implementing a cloud-based disaster recovery solution.
Conducting regular stress tests and simulations to evaluate preparedness.
Establishing a cross-functional resilience task force.
Financial institutions launch targeted initiatives to operationalize their resilience strategy. Examples include:
Cybersecurity Training: Roll out a mandatory cybersecurity awareness program for all employees, with quarterly refreshers.
Disaster Recovery Testing: Conduct bi-annual disaster recovery drills to test the effectiveness of backup systems and response plans.
Technology Upgrades: Migrate legacy systems to a modern, cloud-based infrastructure to improve scalability and resilience.
Regulatory Compliance: Establish a dedicated task force to oversee the implementation of new data privacy regulations.
Initiatives should be prioritized based on their impact and feasibility, ensuring that resources are allocated effectively. The FIs' initiatives are designed to achieve specific resilience objectives.
The final step is to compile all the insights, objectives, actions, and initiatives into a cohesive strategy roadmap. This roadmap serves as a blueprint for achieving operational resilience and should include the following:
Timeline: A clear timeline for implementing initiatives and achieving milestones.
Responsibilities: Defined roles and responsibilities for teams and individuals.
Metrics: Key performance indicators (KPIs) to measure progress and success.
Review Mechanisms: Regular review and update processes to ensure the roadmap remains relevant.
Financial institutions compile their efforts into a comprehensive strategy roadmap. Examples include:
Timeline: A 12-month roadmap with quarterly milestones, such as completing employee training by Q1, upgrading technology by Q2, and conducting disaster recovery tests by Q3.
Responsibilities: Assign ownership of initiatives to specific teams, such as the IT department for technology upgrades and the compliance team for regulatory efforts.
Metrics: Track KPIs like system downtime, employee training completion rates, and compliance audit results.
Review Mechanisms: Establish a quarterly review process to assess progress, update the roadmap, and address emerging risks.
The strategy roadmap should be communicated across the organization to ensure alignment and commitment at all levels. The roadmap by the FIs ensures that resilience efforts are aligned, measurable, and adaptable.
Developing an operational resilience strategy roadmap is a structured and iterative process that requires careful planning, collaboration, and execution.
By laying out challenges, setting objectives, assessing capabilities, determining courses of action, formulating initiatives, and generating a roadmap, organisations can build the resilience needed to thrive in an uncertain world.
A well-executed operational resilience strategy ultimately safeguards business continuity and enhances trust, reputation, and long-term success.
For FIs, operational resilience is not just a regulatory requirement but a business imperative. By following a structured roadmap—laying out challenges, setting objectives, assessing capabilities, determining courses of action, formulating initiatives, and generating a strategy roadmap—financial institutions can build the resilience needed to withstand disruptions and maintain customer trust.
Real-world examples, such as implementing MFA, conducting disaster recovery drills, and upgrading legacy systems, demonstrate how these steps can be applied.
A robust operational resilience strategy enables FIs to navigate uncertainty and thrive in a dynamic environment.
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