Firms can expect to see continued regulatory scrutiny and focus on resilience. The industry is looking forward to seeing how UK regulators update their views on resilience in the next discussion paper expected to be released in Q4 2019.
US regulators are anticipated to articulate their expectations on resilience as direct feedback to regulatory exam. As firms respond to the regulatory line of questioning and showcase their current and target state capabilities, they have an opportunity to shape-up the regulatory agenda and define the bar on “what good looks like” for key capabilities and focus areas.
The working group study by the Basel Committee on Banking Supervision is expected to articulate the core principles of resilience, which may provide a basis for global regulators to come together on a common core regulatory approach to resilience.
How much the global regulators will converge on their resilience approaches in the future is yet to be seen. However, any divergence in regulatory expectations due to jurisdictional differences will have to be reconciled, especially for global firms, given the cross-jurisdictional nature of business services and the supporting infrastructure.
What firms can do to demonstrate greater enterprise resilience
Firms can take these measures to enhance and transform their existing framework and capabilities:
- Assess maturity: Perform a maturity assessment on current state of resilience capabilities against regulatory expectations and industry leading practices
- Strategize: Define an enterprise strategy and framework for resilience
- Map course: Identify and map the most critical business services
- Test tolerance: Establish and test impact tolerances for the most critical business services