Operational Resilience

The Central Bank considers operational resilience to be the ability of a firm, and the financial services sector as a whole, to identify and prepare for, respond and adapt to, recover and learn from an operational disruption.  

An operationally resilient firm is able to recover its critical or important business services from a significant unplanned disruption, while minimising impact and protecting its customers and the integrity of the financial system.

The first step in becoming operationally resilient is accepting that disruptive events will occur, and that these events will need to be managed effectively.

Cross Industry Guidance on Operational Resilience

The Central Bank published the Cross Industry Guidance on Operational Resilience in December 2021 following consultation where responses were received from a wide number of industry bodies and regulated entities. The objective of this Guidance is to communicate to industry how to prepare for, respond to, recover and learn from an operational disruption that affects the delivery of critical or important business services.

The Guidance aims to enhance operational resilience and recognise the interconnections and interdependencies, within the financial system, that result from the complex and dynamic environment in which firms operate.

More specifically, the purpose of the Guidance is to:

  • Communicate to the boards and senior management of Regulated Financial Service Providers (RFSPs), the Central Bank’s expectations with respect to the design and management of operational resilience;

  • Emphasise board and senior management responsibilities when considering operational resilience as part of their risk management and investment decisions; and

  • Require that the boards and senior management take appropriate action to ensure that their operational resilience frameworks are well designed, are operating effectively, and are sufficiently robust. This should ensure that the risks to the firm’s operational continuity do not transmit into the financial markets and that the interests of the customers and market participants are safeguarded during business disruptions.

Cross Industry Guidance on Operational Resilience | pdf 1018 KB

Three Pillar of Operational Resilience

The Cross Industry Guidance on Operational Resilience is built around three pillars of Operational Resilience:

  • Identify and Prepare
  • Respond and Adapt
  • Recover and Learn

These three pillars support a holistic approach to the management of operational resilience and related risks and create a feedback loop that fosters the perpetual embedding of lessons learned into a firm’s preparation for operational disruptions.

Three Pillars of Operational Resilience

3 Pillar Diagram

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