Operational Resilience - A view from beyond the wall

28 November 2019

Operational resilience continues to be a hot topic in the Financial Services industry. While we all eagerly await the consultation paper from the Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA), the recent Treasury Select Committee report re-emphasises the priority the government and regulators are giving to this topic.

Financial Services firms now run operations on a truly global basis. Therefore, collaboration between global teams and those operating in various UK locations is critical if progress is to be made with operational resilience.  

Scotland is home to a number of UK and global focussed financial services firms. Operational resilience is as high on the agenda for them as it is for their counterparts in other parts of the UK.  

Myself and Lewis McKenzie have been fortunate to work with a variety of Scottish clients and have recently spoken at an ISACA Scotland event in addition to hosting our 4th Operational Resilience Roundtable in Edinburgh. These provided forums for attendees to share experiences on matters such as setting impact tolerances and vendor management. 

Reflecting on the conversations at these events I can see the beginnings of a positive mindset shift across firms in Scotland. Twelve months ago we were discussing problems on themes like mapping end to end business services, getting access to and understanding the activities of cloud providers and securing senior management buy-in. There was a general feeling that firms were waiting for the answers rather than working together to resolve common issues. 

Coming out of these recent sessions I was very much reminded of the Andrew Carnegie quote:  “People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.”

However, it’s pleasing to note this mindset is changing. Firms are no longer waiting for the consultation paper or for regulators to provide all the answers. They have realised they need to act now. There is a long way to go and some Firms are further ahead than others but for me the best development over the past year in Scotland is that Firms are starting to share ideas and collaborate to solve common issues through our discussions and roundtables. In my view, collaboration among Firms is the only way these challenges will be addressed.

So aside from this positive mindset shift, what would I say are the key messages firms should take away?

  • Get good people on the project: having the right business, technology and business continuity knowledge is key but more importantly the individuals need to have the right leadership skills to lead disparate teams, navigate organisational politics and make things happen.
  • Ensure you have leadership buy-in and clear accountabilities: operational resilience should have clear ownership and the board should be provided with regular and robust information so they can support and take action in a timely manner.
  • Establish the right disciplines for cloud outsourcing: the role of cloud providers is a subject of a lot of debate at our roundtables. Given the perceived concentration risk this is something the regulators will need to address. However, rather than wait for this, as one participant at the roundtable put it ‘plan for them failing like you would do for any other IT system’. Additionally, ensure you have robust onboarding and supplier management processes to proactively identify and manage any potential issues.

The mindset shift I have noticed in the last 12 months is fantastic. The only way firms will become operationally resilient is if they collaborate and share ideas between their global and UK teams as well as with peer organisations.

Stuart  Birnie

Stuart Birnie | Director, PwC United Kingdom
Profile | Email | +44 (0)7715 211440

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