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Cyber Security: A New EU Operational Resilience Framework

Cyber Security: A New EU Operational Resilience Framework

13th January 2020

The FCA, PRA and the Bank of England have all held consultations on improving the financial stability in the UK markets through operational resilience.

The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have now published Guidelines to address the increasing concern about the changing operational risks posed by the rise in technology and the potential impact this may have upon the stability of the EU financial markets. In addition, the European Commission has no launched a consultation to explore how an enhanced cross-sectoral digital operational resilience framework for the EU financial services industry could be established.

However, as those in the UK will know, this isn’t the first time ‘Operational Resilience’ has been the focus of the regulators, and the actions of the EU authorities follow on the heels of the UK Regulators – the FCA, PRA and the Bank of England - who have all held consultations on improving the financial stability in the UK markets through operational resilience.

Also to note is the contents of the Single Resolution Board’s (SRB) 2020 Work Programme, within which the SRB has also signalled its intent to work on policies related to operational and financial continuity for those banks that are subject to the SRB’s remit.

It therefore seems likely that Operational Resilience will certainly be on the Regulatory Agenda for some time to come and will no doubt be a key area to focus upon over the coming year.

However, with so much regulatory change on the subject of Operational Resilience and the management of third-party risk, Firms, particularly large Financial Services Groups within the Financial Services Industry will face many challenges ahead, not least as there may be different requirements on the same themes with different scope, implementation dates and supervisory approaches by the different bodies, until such time that there may be a unified approach.

Related Reading:

• Cyber Resilience for Financial Services Firms: CQUEST

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