[OR] [FW] Sample Operational Resilience Framework

Operational Resilience Framework (Sample)

Here is a comprehensive (Sample) Operational Resilience Framework tailored for financial institutions in the Asia Pacific (APAC) region.

It incorporates regulatory expectations, industry best practices, and region-specific considerations, aligned with principles from the Basel Committee on Banking Supervision (BCBS), the Financial Stability Board (FSB), and key regional regulators like MAS (Singapore), APRA (Australia), and RBI (India).

Operational Resilience Framework for Financial Institutions in the Asia Pacific Region

1. Governance and Leadership

• Board Oversight
  Ensure the Board of Directors approves and reviews the institution’s operational resilience strategy, risk appetite, and key impact tolerances.

• Senior Management Accountability
  Assign senior executives (e.g., the chief risk officer or chief resilience officer) clear accountability for operational resilience.

• Policies and Standards
  Establish and regularly update operational resilience policies and align with enterprise risk management, BCM, and IT disaster recovery frameworks.

2. Identification of Critical Business Services

• Mapping Critical Business Services (CBS)
  Identify and prioritize services that, if disrupted, could impact financial stability, customer trust, or regulatory obligations.

• Business Service Owners
  Assign owners to each CBS to ensure ongoing oversight and responsibility for resilience.

• Dependencies and Interconnectivity
  Map internal and external dependencies, including people, processes, technology, third parties, and data flows.

3. Impact Tolerance and Risk Appetite

• Defining Impact Tolerances
  Set clear thresholds for each CBS's maximum tolerable level of disruption (e.g., recovery time, customer impact).

• Link to Risk Appetite Framework
  Align impact tolerances with overall enterprise risk appetite and recovery objectives.

4. Scenario Testing and Validation

• Scenario-Based Testing
  Conduct regular tests simulating severe but plausible operational disruption scenarios (e.g., cyber-attacks, pandemics, IT failures).

• Lessons Learned and Remediation
  Use testing insights to identify weaknesses and drive continuous improvements.

• Cross-Jurisdictional Testing
  Include region-specific regulatory scenarios (e.g., MAS TRM guidelines, APRA CPS 230 requirements, RBI guidelines).

5. Third-Party and Outsourcing Resilience

• Third-Party Risk Management
  Ensure outsourced service providers meet the institution's resilience requirements through due diligence, contracts, and ongoing monitoring.

• Concentration Risk Monitoring
  Identify critical dependencies on specific third parties or regions and assess systemic impact in the event of failure.

6. Business Continuity and Crisis Management Integration

• BCM Program Alignment
  Integrate business continuity management, disaster recovery, and crisis communication plans with the operational resilience strategy.

• Emergency Response and Escalation
  Maintain tested and scalable crisis management protocols across branches and jurisdictions.

7. Regulatory Compliance and Reporting

• Local Regulatory Alignment
  Monitor and comply with regional requirements:

  • APRA CPS 230 (Australia)

  • RBI Guidance Note on ORM & Resilience (India)

  • HKMA OR Framework (Hong Kong)

  • BSP ORM Guidelines (Philippines)

  • MAS: Operational Resilience and TRM Guidelines (Singapore)

• Timely Reporting and Engagement
  Establish mechanisms for timely regulatory reporting and supervisory dialogue during disruptions.

8. Culture and Capability Building

• Resilience Culture
  Promote a culture of resilience through leadership tone, awareness campaigns, and staff training.

• Continuous Training
  Equip staff with skills to manage, respond to, and recover from disruptions.

9. Technology and Cyber Resilience

• Resilient IT Architecture
  Invest in robust, redundant, and secure technology infrastructure.

• Cybersecurity Integration
  Align with cybersecurity frameworks (e.g., NIST, ISO/IEC 27001) and regional mandates like MAS Cyber Hygiene and APRA Prudential Standards.

10. Monitoring, Metrics, and Continuous Improvement

• Key Risk Indicators (KRIs) and Metrics
  Track indicators such as system uptime, incident response time, and third-party performance.

• Audit and Review
  Perform regular audits of the operational resilience framework and update based on emerging threats and changes in the business environment.

• Continuous Improvement Loop
  Embed a feedback loop to refine policies, processes, and impact tolerances.

   

  Operational Resilience Framework Versus Policy