Financial firms are increasingly recognizing the importance of operational resilience in the face of evolving threats to their security and continuity. With the world’s money concentrated in the financial sector and the increasing interconnectedness of the industry, the need to be prepared for unforeseen incidents is crucial.
Operational resilience goes beyond traditional business continuity management and disaster response. While these functions are focused on handling disruptions when they occur, operational resilience takes a proactive approach to ensure the reliability of digital systems regardless of the circumstances. The ability to sustain operations and maintain public trust in the global financial system is paramount.
To achieve operational resilience, financial firms can follow a step-by-step action plan. The first step is to gain a holistic view of the risk landscape by assessing operations, interconnections, and continuity requirements. This comprehensive understanding lays the foundation for a future-ready strategy tailored to the organization’s size, complexity, and role in the financial ecosystem.
Identifying both internal and external risks is crucial in developing an effective response plan. Financial firms should identify operations critical to business management and continuity, as well as key dependencies in internal and external systems. Understanding the evolving threat landscape allows for the creation of an actionable response plan that provides relevant information to personnel responsible for protecting against and mitigating disruptions. Seamless communication channels between internal and external groups, including information-sharing bodies, cybersecurity teams, and government partners, are essential for collaboration and minimizing blind spots. Maintaining an inventory of assets, both physical and digital, event classes, and threats ensures preparedness for the unexpected.
Once risks are identified, financial firms can determine their risk appetite and establish the acceptable levels of disruption for each critical operation. This understanding helps prioritize risks and create efficient controls and contingency plans. Building response plans that foster continued synchronization across operations during times of crisis is crucial. Learnings from previous attacks and exercises should inform adjustments and procedural standards. Identifying relevant people and teams and assigning specific roles and responsibilities ensures a structured approach to risk events.
Regular mock drills are necessary to test the components of the incident response plan, both internally and externally. Third-party vendors should be included in these exercises to ensure a coordinated and executable action plan. Effective governance, both internally and externally, is crucial for implementing a proactive, enterprise-wide strategy that complies with regulations while being feasible, effective, and safe.
In a globalized world, operational resilience is key to navigating a complex financial landscape. It reduces the cost of disruptions, improves resource allocation efficiency, and ensures agility in responding to emerging market opportunities. Maintaining customer trust and loyalty is critical in an era of daily cyber incidents making headlines. Regulatory bodies are demanding operational resilience, recognizing its importance for the stability of the financial sector.
Intelligence sharing within the global financial community plays a vital role in achieving operational resilience. It allows firms to understand current and emerging threats and learn from others’ mitigation strategies. Large-scale exercises conducted by organizations such as the US Treasury Department’s Hamilton Series and NATO’s Locked Shields test communication and coordination channels to ensure their efficient functioning during major incidents. These efforts not only minimize operational disruption but also proactively maintain public calm and trust.
Operational risks know no geographical boundaries, and cross-border intelligence sharing and exercises help financial institutions build a comprehensive approach to resilience. Being prepared for the unexpected not only instills confidence and strength but also garners trust from stakeholders, contributing to long-term business success. The financial sector must continue to prioritize operational resilience to adapt to the evolving threat landscape and ensure the stability and security of global financial systems.