Any financial institution can suffer from an IT outage. Over in the United Kingdom, those outages have become far too common, causing a fair bit of friction.
Things have gotten so out of hand that UK regulators have decided to intervene in a rather aggressive manner.
Their new set of requirements is tailored to strengthening the operational resilience of banks and other service providers across the UK.
Over the past few years, numerous UK banks have not just suffered from outages, but severe and long-lasting technical problems.
That is absolutely unacceptable, yet little has been done to improve upon the situation.
As part of this new policy, and financial service player needs to take ownership of their operational resilience.
They will also need to prioritize their investment choices based on how these outages could affect the public interest if left unchecked.
FCA chief executive Andrew Bailey adds:
“It is in the public interest that a resilient financial system is able to supply the most important services with minimal interruption even during severe operational events. The proposed new requirements are aimed at achieving this outcome.
“Disruptive events can have a high impact on consumers and businesses so firms and FMIs need to know where the risks to their service delivery lie and to make sure that they are prepared for any service disruption by testing their planned response.”
It is evident for everyone to see this is not a training exercise by any stretch of the imagination.
Market participants need to take these new guidelines very seriously and act accordingly.