[OR] [AB] [E1] [C5] Identifying Critical Business Services

eBook 1: Chapter 5

Introduction

Operational resilience has become a cornerstone of risk management in the banking sector, particularly as regulators globally emphasise the importance of continuity amid disruptions.

For Alliance Bank, a mid-sized but strategically vital financial institution, implementing an effective operational resilience program requires identifying and protecting its critical business services—those whose disruption would pose a significant risk to the bank’s safety, financial stability, or reputation.

 This could impact customers and the broader financial system.

Purpose of the Chapter

This chapter aims to provide readers with a foundational understanding of the critical business services within Alliance Bank Malaysia that must be prioritised in the development and execution of an operational resilience program.

As financial institutions face rising risks from cyber threats, system outages, and external disruptions, this chapter highlights why Alliance Bank must identify key functions that, if compromised, would severely impact customers, operations, or the financial ecosystem.

Readers will gain insights into which services are most critical, the risks of their disruption, and the steps needed to ensure they can continue operating under adverse conditions.

Below are the critical business services Alliance Bank Malaysia must consider when designing and executing its operational resilience framework:

Retail and Commercial Banking Services

This includes basic banking services such as deposits, withdrawals, account transfers, and online/mobile banking access.

These services are vital to everyday consumers and small businesses, and their disruption could quickly erode customer trust.

Key Components of CBS

• Current and savings accounts
• ATM and card services
• Digital and mobile banking platforms
• In-branch services

Loan and Financing Operations

Providing personal loans, mortgages, hire purchase, and SME financing is crucial to the bank’s business model.

The timely processing and servicing of these financial products must be maintained, even during operational stress.

Key Components of CBS

• Loan origination and underwriting
• Credit assessment systems
• Disbursement and repayment platforms

Payment and Clearing Services

Efficient and reliable payment processing, including interbank GIRO, DuitNow, JomPAY, and international remittances, is fundamental to economic continuity.

A failure of these services could cascade into broader financial-sector instability.

Key Components of CBS

• Domestic and cross-border payments
• Real-time payment systems
• Central Bank clearinghouse integration

Treasury and Liquidity Management

This supports both internal bank operations and corporate customers managing large-scale cash flows.

Operational resilience ensures the bank maintains adequate liquidity and meets its obligations.

Key Components of CBS

• Treasury dealing platforms
• Liquidity risk management
• Investment and foreign exchange services

Trade Finance and Corporate Banking

Alliance Bank services many SME and mid-market corporations through trade financing, supply chain financing, and working capital solutions.

Disruption to these services can halt commercial activity and affect the broader business ecosystem.

Key Components of CBS

• Letter of credit issuance
• Bank guarantees
• Documentary collections

Customer Support and Complaint Resolution

Responding promptly to customer inquiries and resolving issues during crises is essential. This includes contact centres, complaint-handling systems, and support for fraud and transaction-related concerns.

Key Components of CBS

• Call centre infrastructure
• CRM systems
• Fraud dispute resolution units

Cybersecurity and Fraud Prevention

As digital channels grow, so does the threat of cyber incidents. Resilience in cybersecurity safeguards customer data and trust, and prevents service outages due to attacks.

Key Components of CBS

• Threat detection and incident response
• Digital identity and access controls
• Anti-money laundering (AML) and fraud monitoring

Operational Resilience Implementation Considerations

To ensure these critical services remain available during disruptions, Alliance Bank Malaysia must:

• Map dependencies: Understand and document all internal and external systems, vendors, and personnel that support each critical service.
• Set impact tolerances: Define acceptable levels of disruption (e.g., recovery timeframes) for each service.
• Conduct scenario testing: Simulate cyberattacks, system failures, and third-party outages to assess response capabilities.
• Strengthen governance: Establish accountability at the board and executive level for resilience oversight.
• Engage third parties: Ensure critical outsourced services are held to the bank’s resilience standards.
  

This chapter outlines Alliance Bank Malaysia's core business services that are critical to operational resilience. These services include retail and commercial banking, loan processing, payment systems, treasury operations, and cybersecurity.

It emphasises that these services support not only the bank’s operations but also Malaysia’s financial stability and customer trust.

The chapter explores how disruptions in these areas, such as payment failures or cybersecurity breaches, can trigger cascading effects across the bank and its stakeholders.

Furthermore, the chapter outlines how Alliance Bank can implement a practical resilience framework by identifying service dependencies, setting impact tolerances, and conducting stress testing.

It reinforces the importance of strong governance and third-party risk management.

Ultimately, the chapter guides operational leaders, risk managers, and compliance professionals in understanding what services must be protected and how to ensure their continuity under pressure.

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