FREMONT, CA: The financial industry is linked and dependent on one another. Risk management issues and a lack of stress testing posed problems for the entire financial services sector. For instance, several banks announced new rules designed to reduce the "non-cyber" hazards connected to technology. Organisations must now safeguard their data and business processes. With the help of this framework, sector outsourcing practices will receive further guidance.
Operational resilience enhancement has been added to its list of work goals by many businesses for 2023, with an emphasis on cybersecurity and third-party risk management (including cloud service providers). Also included are numerous priorities linked to risk and resilience, trying to guarantee that financial systems are working in the best interest of customers in light of the current financial and economic instability.
Business Resiliency Trends and Best Practices
Creating a Culture of Resilience: Organisations need to be resilient as financial institutions face unprecedented difficulties. Focusing on creating a resilient culture that ensures consistency and shared responsibility, comprehending important business services, and fostering effective communication to support successful decision-making is one important area.
Managing Cloud Risks: The financial industry continues to significantly rely on and transition to cloud-based services because of their obvious advantages in terms of speed, affordability, scale, and resilience. As the use of cloud services keeps growing, financial service companies in particular should continue to invest more effort in reducing cloud risks.
Resiliency in a Net-Zero World
Firms must negotiate a changing social environment in addition to a shifting risk environment. Businesses must adapt their resilience programs to reflect how they are responding to environmental and societal change.
The International Monetary Fund recommends a three-pronged approach to managing climate risks, including increasing risk analysis, improving data and disclosure, and encouraging policy initiatives that support a low-carbon transition.
Upcoming climate-related regulations for European banks in 2023 include three major regulatory initiatives, the EU Taxonomy, the EU Sustainable Finance Disclosure Regulation, and the Climate Risk Stress Test, which are anticipated to influence European banks. The necessity of early and correct disclosure of climate-related risks and opportunities to investors and stakeholders is stressed by the new laws.
