Operational resilience refers to an FI’s ability to prevent, adapt, respond to, recover from, and learn from operational disruptions while delivering critical customer service.
A clear OR vision and strategy are essential for banks to build a robust framework that ensures continuity, protects customers, and maintains trust in the financial system.
This article explores the importance of setting an OR vision and strategy, provides examples of what these might look like for an FI, and outlines the key components of a successful OR framework.
An OR vision and strategy are the foundation for an FI’s approach to managing operational risks and disruptions.
They provide a clear direction, align stakeholders, and ensure the organization is prepared to handle various potential disruptions, including cyberattacks, IT failures, natural disasters, and geopolitical events.
The vision articulates the bank’s long-term aspirations for operational resilience. It reflects the organisation’s commitment to safeguarding critical services, protecting customers, and maintaining financial stability.
It defines how the FI will identify critical services, set impact tolerances, test resilience, and continuously improve its capabilities.
The vision and strategy ensure that operational resilience is embedded into the FI’s culture, processes, and decision-making.
A well-crafted OR vision is aspirational, customer-focused, and aligned with the bank’s mission. Below is an example of an OR vision for an FI:
"To be a trusted and resilient financial institution that ensures the uninterrupted delivery of critical services to our customers, even in the face of significant disruptions.
We will achieve this by embedding resilience into our culture, investing in advanced technologies, and fostering collaboration across our organisation and with external partners.
Our commitment to operational resilience will safeguard our customers, protect the financial system, and uphold the trust placed in us by our stakeholders."
This vision emphasizes the bank’s dedication to customer protection, trust, and continuous improvement while highlighting the importance of collaboration and innovation.
In the context of BCM Institute's training requirement, it is usually extracted from the key stages of the three phases of the Operational Resilience Planning Methodology.
In most cases, it is driven by the demand from the respective central banks and regulators.
It typically includes the following components [Phase-Stage] of the OR planning methodology:
Example: The FI identifies payment processing as a critical service because it directly impacts customers and is systemic in importance.
Establish the maximum acceptable level of disruption for each critical service (e.g., downtime, financial loss, customer impact).
Example: The FI sets an impact tolerance of no more than 2 hours of downtime for payment processing during a disruption.
To effectively implement the OR vision and strategy, FIs should focus on the following key components:
Leadership Commitment: Senior management and the board must champion operational resilience and allocate the necessary resources.
Customer-Centric Approach: Prioritise protecting customer interests and ensure minimal disruption to critical services.
Collaboration: Foster collaboration across business units, regulators, and external partners.
Data-Driven Decision-Making: Leverage data and analytics to identify risks, monitor performance, and drive improvements.
Regulatory Compliance: Align the OR strategy with regulatory requirements and expectations.
Culture of Resilience: Embed resilience into the organization’s culture through training, awareness, and accountability.
Setting a clear OR vision and strategy is essential for FIs to navigate the complexities of the modern financial environment.
By articulating a compelling vision and developing a comprehensive strategy, FIs can build the resilience to withstand disruptions, protect customers, and maintain trust.
The examples provided in this article illustrate how a bank can define its OR vision and strategy and ensure that operational resilience becomes a core part of its operations and culture.
In an era of increasing uncertainty, banks prioritising operational resilience will safeguard their future and contribute to the stability and reliability of the global financial system.
A robust operational resilience strategy enables financial institutions to navigate uncertainty and thrive in a dynamic environment.
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.