Organizations are used to responding to regulatory, environmental, technological, or internal structural changes. Recent events, however, have kicked the amount of change into high gear – and made it crystal clear how critical it is to build operational resilience
Here are 6 actions you can take now to build operational resilience and ensure your organization is well prepared for future disruption.
1. Build on Existing Processes and Systems
Implementing an operational resilience framework doesn’t necessarily mean starting from scratch with new systems, people, and processes. Operational resilience can be achieved through effective risk management.
The focus of risk management traditionally has been on reacting to events that already happened, with much less attention paid to proactively planning for potential risk events. The purpose of an operational resilience framework is to put structure in place to help you anticipate what’s ahead so you can better plan for and withstand the impact of incidents.
Some of the building blocks for achieving operational resilience already may be in place. Think about your existing processes for tracking key risk indicators, risk and control assessments, and scenario analysis. Assess the maturity of each component of your risk management framework to uncover what enhancements need to be made to improve operational resilience.
2. Know Your Third Parties
Some of your most important business services may be provided by third parties. You might rely on third parties for distribution, operations, or financial services. To be truly resilient, you need to understand exactly how your third parties work with the organization and incorporate them into your resilience planning. Connect with your partners to fill in any knowledge gaps.
3. Learn from Experience
A crucial part of building operational resilience is to learn from past events, both internal and external. How well did your business respond to the pandemic, for example? If mistakes were made, take the time to dig deep into the reasons why things went wrong. What measures need to be put in place to ensure the same mistakes don’t happen again? Adapting systems and processes in direct response to specific failings will effectively build operational resilience.
4. Develop Stakeholder Communication Plans
Make sure you have a robust communication strategy to support your resilience program. Think about how you will communicate with regulators, third parties, and customers in the event a key business service is disrupted.
Ensure your staff is sufficiently informed to react appropriately to any disruption. You can prepare templates and talking points in advance to speed up response time to customer queries. In the event of disruption, information must get out quickly, so think about what information will be needed and who should be involved in the process to speed up your response.
5. Deliver Actionable Reporting
Board members aren’t necessarily experts in risk management, but they do need to be armed with the right data and intelligence to make informed decisions that will keep the organization on track. They need visual, digestible, and actionable reports with an aggregated view of real-time information.
6. Assess Your Technology
You can’t build operational resilience using disparate documents, emails, and spreadsheets. You need integrated technology that centralizes risk information and makes sense of a large and complex data set.
Automated processes and point-and-click reporting also significantly reduces the administrative burden so you can spend your time more effectively – and deliver timely and accurate reports to top executives.
Operational resilience is a particular challenge for financial services organizations, as it is now being closely regulated around the world. In the UK for example, the PRA, FCA, and Bank of England have outlined a detailed operational resilience framework to which all financial services firms must comply by the end of 2021. This is a daunting prospect for many financial services firms already dealing with a long list of other regulatory obligations.
Operational resilience has never been more important than it is today. Whether you are in the financial services industry looking to comply with strict regulations or another industry looking to increase agility, operational resilience is certain to deliver a competitive advantage and long-term stability.
For more insights into operational resilience, UK regulatory requirements, and a suggested approach to implementation, watch our on-demand webinar, Operational Resilience – Regulatory Expectations, Challenges, and Opportunities.