[OR] [RBI] [10] Essential Elements of Operational Resilience

Essential Elements of Operational Resilience

Operational resilience is built on several essential elements that enable an organization to withstand and quickly recover from disruptions.

These elements include strong governance, comprehensive risk management, effective incident response, and continuous improvement.

By ensuring that each of these components is well-established and integrated, organizations can maintain critical functions, protect their reputation, and meet regulatory requirements even in the face of unforeseen challenges.

Operational resilience is about surviving disruptions and thriving in a dynamic and often unpredictable environment.

Principle 10: Integration with Operational Risk Management

Operational resilience results from effective Operational Risk management, encompassing risk identification, assessment, mitigation, and control monitoring.

Recognising that disruptions are inevitable, REs (financial institutions) must prepare to respond, adapt, recover, and learn from such events with minimal impact on critical operations.

This proactive approach supports an RE's ability to maintain continuous operations and minimize losses during disruptions.

Critical Components of Operational Resilience

Preparedness and Flexibility

• Preparedness. Ensuring adequate preparation to withstand and absorb disruptions.
• Flexibility. Developing the ability to respond, adapt, and recover from disruptions.

Business Continuity and Third-Party Dependencies

• Maintaining robust business continuity plans.
• Managing dependencies on third-party providers.
• Ensuring reliable technology infrastructure.

Consistent Implementation of Risk Management Frameworks

• Integrating business continuity, third-party risk management, ICT & cyber risk management, and incident management within the broader Operational Risk Management framework.
• Adopting a holistic approach to enhance resilience across all critical operations.

Focus on Critical Operations

• Prioritising operations essential to the RE and the financial system.
• Understanding interconnections and interdependencies in delivering these operations.

Harmonization with Recovery and Resolution Plans

• Aligning operational resilience strategies with recovery and resolution plans to ensure financial system stability.
• Ensuring that critical operations and shared services are protected and prioritized.
• By adopting these principles, REs can enhance their operational resilience, ensuring continuous operation and stability despite disruptions.

Comments from the Author

Operational Risk Management and Operational Resilience should be closely aligned.

From the perspective of Operational Resilience, Operational Risk Management is the key pillar supporting Operational Resilience.

More Information About Blended Learning OR-5000 [OR-5] or OR-300 [OR-3]

To learn more about the course and schedule, click the buttons below for the OR-3 Blended Learning OR-300 Operational Resilience Implementer course and the OR-5 Blended Learning OR-5000 Operational Resilience Expert Implementer course.