Friday Five Round-Up - Episode 3: Operational Resilience in Financial Services
Published By Ben Saunders - OpRes Founder
Roughly a 2-minute Read
Welcome to our third “Friday 5 Round-up” where we discuss all manner of things operational resilience-related, across financial services!
This week has seen a number of announcements with the Fed issuing guidance for community Banks when partnering with FinTechs. Service outages were experienced at AWS. The FDIC opened up its Tech Sprint aimed at better understanding operational resilience. Whilst APRA has announced its corporate strategy with a focus on operational resilience. But let’s not give it all away in the first paragraph. Read on to learn more!
28/08/2021: US federal bank regulatory agencies issue guidance for community banks on fintech relationships
Finextra reported on a recent set of guidelines published by the US Federal Bank aimed at supporting Community Banks, in their growing efforts to partner with specialised FinTechs. The guide covers six key areas of due diligence that community banks can consider when exploring arrangements with fintech companies: business experience and qualifications, financial condition, legal and regulatory compliance, risk management and control processes, information security, and operational resilience. You can find the report here.
29/08/2021: EY & IIF Conduct Bank Risk Management Survey
Bernews reported on a joint research publication conducted by EY & IIF, from back in June of this year, regarding Resilient banking: capturing opportunities and managing risks over the long term. This is the 11th annual EY/IIF global bank risk management survey which discusses how COVID-19 has exposed what resilience really means for banks today. Some interesting data points that stood out to us here at OpRes:
“Based on lessons learned from the Covid-19 pandemic, 93% of CROs expect to see the introduction of new or additional regulatory requirements on operational resilience, and 60% of CROs expect the same on financial resilience.
Whilst 75% of respondents indicated that Cyber Security was a key area of concern for their organisations. In respect of risk management skillsets over the next three years. Interestingly, operational resilience was also seen by 46% of respondents as an area that their firms either had to acquire or improve the skills of their people to cope with growing regulatory focus and an increasingly cloud-centric ecosystem.
30/08/2021 FDIC Open’s Up Applications for its Tech Sprint Program Aimed at Operational Resilience
In our first-ever Friday Five round-up, we reported on the FDITECH sprint program and its upcoming efforts to explore “What would be the most helpful set of measures, data, tools, or other capabilities for financial institutions, particularly community banks, to use to determine and to test their operational resilience against a disruption?” Applications are now open for organisations that are interested in participating in this exercise. You can apply online over at the FDIC website.
01/09/2021: APRA has published a new Corporate Plan which sets out how it plans to enhance the resilience of the Australian financial system
Australia’s Prudential Regulatory Authority (APRA) has published its forthcoming policy priorities and it is not a surprise to see operational resilience as a prominent discussion topic throughout the publication. In the paper, APRA points out that there is a “need to improve operational resilience across regulated entities” and that it “intends to set overarching expectations for the management of operational risk and other non-financial risks” as part of their corporate plan.
02/09/2021: AWS Tokyo region has six-hour partial outage, disrupting banks, brokerages, and airlines
AWS experienced a partial disruption of its Tokyo region this week with firms such as Matsui Securities Co., SBI Securities Co., Rakuten Securities Inc., and Mizuho Bank reporting disruptions with its internet services. Whilst the majority of Tokyo’s region compute resources were not disrupted. It was reported by DCD that there was an outage experienced across multiple hardware devices underpinning AWS’s Direct Connect networking services.
Thanks for Reading
That’s it for this week’s round-up. Thanks for reading and if you want to have Operational Resilience news beats sent directly to your mailbox, then feel free to register your details via our online form.
Have a great weekend! All the best,
Ben
