Operational resilience and preparing for BREXIT

25 September 2018 Alistair MacDougall Compliance

The FCA has published a Discussion Paper on operational resilience. Although at first sight this would appear to be aimed at large financial institutions, it is worthwhile reading for all firms.

The Discussion Paper explains why operational resilience is relevant to the supervisory authorities’ objectives, why it should matter to firms and their senior management.

The interconnectedness of the Financial Services industry and its increasing reliance on complex technology and shared infrastructure creates risks as well as benefits.

Operational resilience failures, including those caused by cyber-attacks and technology failures, pose a risk to firms ability to provide their services and can cause harm to consumers.

Disruptive events are bound to happen so all firms need to plan for these eventualities, be able to absorb the shocks, and maintain or quickly resume the business services they provide to consumers.

Preparing for BREXIT
BREXIT is generally considered to be a potentially disruptive event that firms will need to deal with in the near future. The FCA has published some high-level guidance for firms.

Don’t forget to check Our View about this article and the Actions Required By You

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Our View

There is nothing certain except death and taxes. So the saying goes. But in the world of financial services, the inevitability of constant change and of disruptive external events causing problems is also a certainty.

Most firms have some sort of business continuity plan but often the plan is focused around data back ups and does not cover all the potential risks to the ability of the firm to deal with wider events, some not IT related at all.

The FCA continues to consider the robustness of firms’ systems and controls as a key factor in consumer protection and market integrity. Firms should ensure that they create systems and controls that provide as much resilience as possible to existing and potential risks and events.

A particular focus now should be to consider how BREXIT, however and whenever it comes, might affect your business. There is a distinct lack of clarity around what BREXIT will ultimately look like but firms need to keep abreast of events rather than believe that they can defer all decisions until everything is settled.

Action Required By You

Review the FCA guidance around operational resilience and preparing for BREXIT;
Regularly review the systems and controls within the firm and update/amend as required;
Contact ATEB if you would like to discuss how we can help.

About the Author

Alistair MacDougall

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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