Financial Services is a sector that I have worked closely with while supporting retail banking clients at Profusion. We support brands with digital transformation programmes to enhance customer-centricity and service. The COVID19 pandemic has forced many firms to rethink daily practices and use fast-tracking digital transformation to display their emergency communications. We have been supporting our clients in this unprecedented situation and helping brands to accelerate this transition. Most businesses have realised how now is the best time to we turn to digital tools to be able to operate effectively and make better decisions. The crisis has shown that the most resilient organisations are those who have invested in digitisation and have been able to reduce their reliance on stores and contact centres. We see brands fast track digital transformation and they are required to rethink their business model to offer the same level of service while improving the client experience and meet the new demand for digitised services.

COVID 19 has forced organisations to realise the importance of Operational Resilience. It is time to proactively re-examine areas of potential weakness and think about their capital and operational risk planning now. We have recently tested our business continuity plan in light of this pandemic. Like all, we have been made to shut our London office, relocate all our staff and move to test the plan and ensure that we can all work remotely, testing all of our tech and alternative ways of working. We have been successful in doing  this with no loss of service to our clients and our plan has remained strong over the last 3 months.  The Profusion team have continued to deliver the highest level of service to all our clients including taking on out of hours and emergency work when some of our clients in house teams needed support.

A new regulation from the Financial Conduct Authority (FCA) aims to strengthen operational resilience in the UK financial services sector and firms must have plans in place to deliver essential services, no matter what the cause of the disruption. This includes man-made threats such as physical and cyber-attacks, IT system outages and third-party supplier failure as well as natural hazards such as fire, flood, severe weather and pandemic flu. Regulators have been monitoring the operational resilience of financial services firms during the COVID pandemic and the government restrictions consequently imposed. Firms should create business continuity and disaster recovery plans and test the operational resilience of all areas of society, including in business and technology. 

What is Operational Resilience?

An organisation should continue to provide business services in the face of adverse operational events by anticipating, preventing, recovering from, and adapting to such events. It is about preventing operational incidents from impacting consumers, financial markets and UK financial system.

The Bank of England (the Bank), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published guidelines to strengthen operational resilience in the financial services sector. Under the proposals, companies would be expected to:

  • identify their important business services that if disrupted could cause harm to consumers or market integrity, threaten the viability of firms or cause instability in the financial system;
  • set impact tolerances for each important business service, which would quantify the maximum tolerable level of disruption they would tolerate;
  • identify and document the people, processes, technology, facilities and information that support their important business services;
  • take actions to be able to remain within their impact tolerances through a range of severe but plausible disruption scenarios;
  • maintain an internal and external communication strategy and provide clear, timely and relevant communications to consumers and other stakeholders in the event of an operational disruption.

Organisations should consider how they will protect the key services on which consumers and the wider economy rely. Firms must identify which services are ‘key’ for consumers and how much disruption could be tolerated, under what circumstances. The systems and processes that support these business services should be mapped.  

Firms should assess how the failure of an individual system or process could impact the business service. Impact tolerance requires firms to think about services from the perspective of their consumers, as well as the wider UK financial system and financial markets. Firms should test their ability to withstand a severe event using scenarios and by learning from experience, that resilience meets the firm’s tolerance and invest in appropriate systems, oversight and training.

Firms should constantly review and update the Operational Resilience framework on an ongoing basis to mitigate emerging risks.

If you need support to be more resilient and fast track digital transformation to meet the new demand for digitised services please get in touch:

Source: FCA, Bank of England, FT

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