Keeping Up with Operational Resilience Regulations: A Review of UK FCA, EU DORA, and US OCC Requirements

Operational resilience is a critical component of any organization's risk management strategy, and regulatory bodies around the world have recognized its importance by developing regulations that require organizations to ensure their operational resilience. In this article, we will explore the regulations around operational resilience covering the UK Financial Conduct Authority (FCA), the EU Digital Operational Resilience Act (DORA), and the US Office of the Comptroller of the Currency (OCC).

UK FCA Regulations on Operational Resilience :

The UK FCA has developed regulations on operational resilience that require financial firms to identify their important business services and ensure that they can continue to provide them in the face of disruption. The FCA's regulations require financial firms to:

1. Identify important business services: Financial firms must identify their important business services and ensure that they can continue to provide them in the face of disruption. The FCA expects firms to have a clear understanding of their important business services and the risks that could impact them.
2. Set impact tolerances: Financial firms must set impact tolerances for their important business services, which define the maximum amount of disruption that the firm can tolerate without compromising the provision of the service. The impact tolerances should be based on the needs of customers and the broader financial system.
3. Test and improve resilience: Financial firms must test and improve their operational resilience by conducting regular testing and scenario analysis to ensure that they can continue to provide their important business services in the face of disruption. The FCA expects firms to learn from past incidents and use this knowledge to improve their operational resilience.

EU DORA Regulations on Operational Resilience :

The EU DORA is a regulatory framework that sets out requirements for operational resilience in the financial sector. The framework covers a wide range of topics, including risk management, business continuity, and cybersecurity. The main requirements of the EU DORA are:

1. Identification of critical business functions: Financial firms must identify their critical business functions and ensure that they can continue to provide them in the face of disruption. The critical business functions should be based on the needs of customers and the broader financial system.
2. Risk management: Financial firms must identify, assess, and manage risks that could impact their critical business functions. The risk management process should be based on a comprehensive understanding of the risks and the potential impact on the business.
3. Business continuity: Financial firms must have robust business continuity plans in place to ensure that they can continue to provide their critical business functions in the face of disruption. The plans should be regularly tested and updated to ensure their effectiveness.
4. Cybersecurity: Financial firms must have robust cybersecurity measures in place to protect their critical business functions from cyber threats. The cybersecurity measures should be regularly tested and updated to ensure their effectiveness.

US OCC Regulations on Operational Resilience :

The US OCC has developed regulations on operational resilience that apply to national banks, federal savings associations, and federal branches and agencies of foreign banks. The OCC's regulations require banks to:

1. Identify and assess risks: Banks must identify and assess risks that could impact their operations and take steps to mitigate those risks.
2. Develop business continuity plans: Banks must develop business continuity plans that address the potential impact of disruptions on their operations and outline the steps that they will take to ensure continuity of critical functions.
3. Test and improve resilience: Banks must regularly test and improve their operational resilience by conducting exercises and drills to ensure that their business continuity plans are effective.

Conclusion

Operational resilience is a critical component of any organization's risk management strategy, and regulatory bodies around the world have recognized its importance by developing regulations that require organizations to ensure their operational resilience. The UK FCA, EU DORA, and US