The expanding scope of operational resilience regulatory requirements
Financial services firms are particularly vulnerable to disruption because the potential operational risks they could face are significant, and could be enormously detrimental to our global economy and society. It’s why the financial services industry operates in a highly regulated environment, and why recent operational resilience compliance mandates centre on these firms.

In today’s landscape of fast-paced transformation, building operational resilience is crucial for all companies, regardless of size, industry, or revenue. Financial services may be the first to undergo operational resilience regulation, but they will by no means be the last.

A proactive approach to compliance is essential for navigating the web of mandates that vary across regions and avoiding costly payouts. Regulatory change has increased by 500% since the 2008 global financial crisis, heightening regulatory costs in the process (Ascent).

Globally, the Basel Principles for Operational Resilience build on existing operational risk principles ‘to strengthen banks' ability to withstand operational risk-related events that could cause significant operational failures or wide-scale disruptions in financial markets.’ Key regional standards and publications are outlined below:

United Kingdom Financial Conduct Authority (FCA) PS21/3 Building operational resilience standard
Australia Australian Prudential Regulation Authority (APRA) CPS 230 Operational Risk Management
Europe European Council Digital Operational Resilience Act (DORA)
Ireland Central Bank of Ireland Cross Industry Guidance on Operational Resilience
Hong Kong Hong Kong Monetary Authority (HKMA) OR-2 Supervisory Policy Manual (SPM)
United States Federal Reserve System Sound Practices to Strengthen Operational Resilience

“Collaboration between regulators, the government and industry is essential to develop and strengthen the regulatory framework and how organisations across financial services respond. So it’s encouraging to see the Bank of England, PRA and FCA working closely to increase the resilience of the sector, while recognising the importance of supporting innovation," said Dr Henry Balani, Global Head of Industry & Regulatory Affairs, Encompass Corporation.

Stay ahead of evolving regulatory requirements

Download the Operational Resilience Outlook Report 2024 for expert advice and actionable steps to progress your resilience strategies.

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