Introduction
In recent years, financial institutions have witnessed unprecedented levels of change. Disruptions in the industry are more acute than ever before and can be attributed to a number of factors including increased competition for customers and a reduction in barriers to entry. These changes pose a challenge to many financial institutions who need to adapt quickly and effectively without sacrificing on quality or efficiency. In this article we'll discuss why operating resilience is important for financial institutions and how they can put it into practice.
Building operational resilience
Operational resilience is the ability of an organisation to continue delivering its services in a consistent manner despite the impact of disruption.
Operational resilience encompasses a broad range of tools and techniques that can be used by financial institutions to mitigate risk, including:
- Incident response planning
- Business continuity planning (BCP)
- Crisis communications plans
These actions help to ensure that an organisation has the capacity to recover from any disruption, allowing critical services such as payments processing and trading platforms to be restored as quickly as possible.
Factoring in supply chain risk
The importance of supply chain risk
Supply chain risk can have a significant impact on operational resilience. The most serious risks are often those that are unexpected, non-linear and complex in nature. Supply chain risk can also have an adverse impact on other key performance indicators such as customer satisfaction levels, cost control, profitability and compliance with regulatory requirements.
How to build resilience? In order to strengthen your organisation's ability to face supply chain disruptions and avoid losing customers or market share in case of disruption, you need to establish clear processes for identifying potential hazards throughout the supply chain while also developing effective strategies for mitigating these risks. This will allow you not only to cope with disruptions but also enable your business continuity plan (BCP) or crisis management plan (CMP).
The importance of cyber resilience
Cyber resilience is the ability of an organization to maintain business continuity and recover from a cyber attack. It involves having a plan in place to deal with an attack, as well as training staff on how to mitigate risks.
Organizations should also focus on protecting their data and strengthening their perimeter defenses, including firewalls and access controls.
For example, if you're dealing with financial fraud, it's important that your network is secure so that hackers can't break into your system or steal data from within it. This means having effective firewalls in place—which may include intrusion detection systems (IDS) or intrusion prevention systems (IPS).
Preparing for the worst
It is important to plan for the worst-case scenarios. This can be done by implementing a business continuity strategy, which prepares you for disasters, both natural and man-made.
The first step in this process is creating a plan that details how your organization will react when something goes wrong. The second step involves having an on-call team that is ready to respond at any time of day or night (or even weekends) to handle whatever situation may arise.
Operational Resilience leads to better customer experience and lower costs.
Operational resilience leads to better customer experience and lower costs.
- Operational resilience leads to better customer experience. When the systems and processes are up and running, a company is able to serve customers more productively, with higher quality and in real time. This helps drive loyalty, which creates a stronger brand image for the company and makes it more likely that they will return as customers, increasing profits in the long run.
- Operational resilience leads to lower costs. Companies that are able to recover quickly after an operational disruption often have lower expenses because they do not have as many unexpected outages or prolonged downtimes that would otherwise lead to increased manual workloads (e.g., answering calls), overtime hours spent fixing problems caused by downtime (which can be taxing on employees), additional contractors hired during times of high workloads such as those experienced during major interruptions like cyber-attacks or natural disasters — all things that cost money!
Conclusion
Operational resilience is a critical part of any business, but especially for a financial institution. The best way to prepare for an emergency or natural disaster is to have regular drills and make sure that your employees are prepared in case something does happen. By taking steps now, you can avoid major disruptions later on.
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