There’s something very satisfying about finding you have the right tool for the job. For a regulator, the tools of their trade are the rules they make and the powers they have to enforce them. And the UK regulators have recently added to their toolkit.
New rules on operational resilience start to apply to some UK firms from 31 March 2022. Seeing that digitalising financial services brings new operational risks, the FCA, PRA and Bank of England want the sector to be better prepared for disruption to important business services.
But it’s not only the rules which matter. Operational resilience is a new lens through which to understand how any firm connects with customers, counterparties and the wider financial market. As our latest FintechLinks blogpost points out, even firms outside the scope of the new regime can expect the regulators to use the language of operational resilience when they deal with firms.
All of which means that, if firms botch their response to IT disruption, the regulators should be tooled up to clamp down.
Beyond the rules themselves, operational resilience is now part of the regulators’ mindset.