Operational Resilience for financial firms

The first stage of our process involves mapping the firm’s environment (clients, systems, and suppliers) and major internal stakeholders.

We perform the mapping with our clients using our tried and tested Trilayer Business Process Analysis™. It analyses the process on three levels: process execution, supporting data, and risk management. This way, we capture the potential impacts of disruptions in a broad spectrum of scenarios.

Based on these maps, identification of business-critical processes can be undertaken. For example, FCA defines such processes as ones that, “if disrupted, could cause intolerable harm to consumers of your firm or risk to market integrity, threaten the viability of firms or cause instability in the financial system”.

Once the critical processes are identified, firms should set operational tolerances, i.e., maximum tolerable disruption for these services. Time/duration of disruption is usually the primary metric used across the processes, however additional appropriate metrics are often useful, depending on the specifics of the firms’ processes.

We work with our clients to define appropriate metrics and calibrate tolerable disruption levels, considering clients’ requirements, the orderly operation of financial markets, and the firm’s overall tolerable risk levels and reputation.

To ensure ongoing maintenance of operational resilience and adherence to calibrated operational tolerances, testing based on severe but plausible scenarios is used. The level of testing will depend on the sophistication level of the firm and the risk level of the service.

We offer our clients several approaches to testing, depending on the identified requirements, including theoretical scenario analysis, interactive reviews and walkthroughs, and full-scale simulations. These are applied depending on the client"s requirements, such as risk levels, systems availability, and specific scenarios.