A qualitative study of operational resilience in financial institutions

Sharada Iyer, George del Hierro and Indira Guzman

Journal of Operational Risk

Abstract: Large financial institutions such as investment banks, retail banks and insurance companies, also known as global systemically important banks (G-SIBs), can cease to perform their critical functions when faced with major disaster events. Events such as widespread technology outages, cyber attacks and global pandemics could have a far-reaching impact, threatening the viability of these firms, as seen in the 2007–9 global financial crisis. New regulatory requirements put forth by the Bank of England and the Basel Committee on Banking Supervision (Basel III) require G-SIBs to have sound operational resilience practices for their business services. These are due to be implemented in phases by 2025. While the concept of operational resilience is not new, companies have traditionally approached it separately and as needed for specific business functions. The new requirements necessitate G-SIBs look at sustainable solutions more holistically to protect their end customers and shareholders. Our study leverages survey-style qualitative research methodology: it harnesses candid and pragmatic feedback from a sample of 21 G-SIB employees to formulate recommendations for this specific aspect of regulatory requirements. Given our findings, we encourage G-SIBs to take an open-minded approach

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Persistent link: https://EconPapers.repec.org/RePEc:rsk:journ3:7960306

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