Almost one-third of global bank leaders say “scale and complexity” make it tough to satisfy regulators’ demands for stronger “operational resilience”, while 16 per cent say budgets for doing so are constrained, a survey by Herbert Smith Freehills has found.
After the Reserve Bank and the prudential regulator specifically flagged emerging risks around the stability of IT systems as digitisation in the economy accelerated during the crisis, the latest global bank review by the law firm finds resilience as the third biggest concern for senior managers over the next three years (after broad regulatory change and digital transformation).
Regulators define “operational resilience” as a bank’s ability to prevent, respond to and learn from disruptions to operations. The RBA last week flagged growing outages of bank payment systems this year as a concern.
Australian regulators are “developing a set of standard operational performance disclosures, with the intention of focusing banks and their leadership on ensuring the reliability of their retail payment services”, a team of global bank partners of Herbert Smith Freehills said in the review.