Achieving Operational Resilience in Financial Sector

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Operational resilience in the financial industry affects many other niches. When impacted by a disaster, whether of a natural origin or human-made, banks and credit unions provide critical support for the entire community. From the basic steps of Business Continuity Management to advance analysis of operational resilience in the financial sector, this guide is a helpful resource while emphasizing the importance of enterprise-wide resilience strategy.
achieving operational resilience in financial sector


The history of business continuity planning for banks and financial crises that inevitably impact banking institutions has taught us that nothing is 100 percent certain or safe. Crises come in different forms. The guiding principle for achieving business resilience in the financial industry is to prepare and adapt to emerging threats. To become resilient in the face of any threat, organizations must operationalize before, during, and after a business interruption. There are significant capabilities that organizations must build as part of their resilience strategy to help thwart the disruptive events and business impacts.

When created properly, resilience is a strategy that permeates all business functions and should be devised with a broad, enterprise lens.

The Objectives of Business Continuity Planning

Business continuity planning is essential to all companies during disruptions. In the banking industry, in particular, it aims to accomplish the following objectives:

  • To reduce financial loss to the banking institution.
  • To ensure customers and financial market participants continue to be served.
  • To diminish the negative impact of disruptions on the bank’s reputation, market position, liquidity, credit quality, strategic plans, and operations.
  • To maintain the bank’s ability to comply with applicable laws and regulations.

Natural disasters produced overall losses of around US$ 68 billion in the first half of 2020.

Munich Re, 07.23.2020

A bank’s BCP must always consider regional disasters, and possible staff inaccessibility and losses. This is especially useful in the case of pandemics. Viral outbreaks, such as COVID-19, do not only impact staff availability but also affect customers who may become paralyzed with fear and panic, leading to increased delinquencies, higher internet banking volume, more requests for additional credit, and, at worst, bank runs.