Operational resilience lessons from the coronavirus crisis
Fund Operator speaks to Mark Gillan, Head of Operations at AJ Bell about the steps his firm has taken toward operational resilience, the lessons that an be learnt from coronavirus and the greatest barriers to business continuity
Sara Benwell POSTED ON 5/7/2020 4:30:44 PM
Sara Benwell: What steps has your company taken to build operational resilience?
Mark Gillan: Operational resilience is a standing agenda item for our firm’s Risk Committee. To support this, we have built a formal operational resilience policy.
This identifies our key processes and most important business services, and maps them end-to-end. It allows us to analyse all of the steps and resources required to deliver our services, establish the potential points of failure within each, and document detailed procedures to prevent disruption.
Sara: What are the key lessons that investment companies can learn from the coronavirus crisis in terms of business continuity?
Mark: Despite a lot of focus on this area in recent years, some investment firms were caught on the back foot by the coronavirus crisis.
Whilst you could never predict precisely how a global pandemic would impact your operations, adequate preparation and modelling can help smooth the impact of any disruptive event.
Operational resilience should be at the forefront of your firm’s risk management, with visibility at a senior level – not an afterthought or a box-ticking exercise.
Importantly, firms must regularly test their procedures, including stress tests of extreme scenarios, and rapidly absorb any lessons from these tests.
Sara: What are the three greatest barriers to operational resilience?
- Technology – this can be a blessing, as we have seen in the coronavirus crisis with remote working and video conferencing helping firms to remain productive.
But it can also be a curse, as increasing complexity and levels of automation brings increased risk of failure. Make sure that you have arrangements in place to cover the unavailability of your most critical technology.
- Third-Party Suppliers – many firms’ policies will fall over due to failures in relationships with third parties.
Operational resilience should form a part of your due diligence on suppliers and be worked into your stress testing. Ideally this should be taken further and fourth- and fifth-party supplier relationships considered in your planning.
- People Management – by far the most important.
Solutions will always be found to system problems, but managing people effectively in a scenario like coronavirus can be difficult.
Home working is novel for many members of staff, and some will find it hard to adapt, with many burning out in what can be a stressful situation.
You can’t pour from an empty cup – ensure that your team are supported, have a sensible, structured routine and workload, and have a clear dividing line between work life and home life.
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