Progress Amidst Complexity

2025: The Year of Resilience

In an era where businesses strive to adapt and thrive amidst constant change, operational resilience has emerged as a critical focal point. The inaugural Bolst Operational Resilience Roundtable in February 2025 gathered industry leaders to delve into the pressing issues and advancements in Op Res. This article aims to encapsulate the essence of the discussion, highlighting both challenges and successes, while encouraging continued dialogue on these important issues.

The Singular Burden of Operational Resilience

The roundtable revealed a trend: Op Res specialists are often on their own which raises a single point of failure concern, more so in the SME segment. Most participants noted they stood alone in their roles, underscoring the need for broader awareness and engagement across departments. This isolation is compounded by a lack of cohesive regulation and a common language across geographies, further complicating the resilience landscape. As business resilience evolves, we are beginning to see additional roles created to support firms in continuing to achieve their resilience goals beyond the March 2025 UK regulatory deadline.

Scenario Development and Resource Challenges

Developing scenarios is a resource- intensive process that encompasses a variety of challenges and demands careful consideration, especially when completed manually. Additionally, the repetition of similar scenarios can lead to disengagement among participants, especially when the engagement from Important Business Service (IBS) owners is key to achieving a successful outcome from the scenario exercises. One of the primary hurdles is the balancing of regulatory requirements with the specific needs of the company while regulatory demands require meticulous attention to detail and thorough self-assessment, diverting resources away from other critical tasks. Moreover, the reliance on manual processes and spreadsheets adds another layer of complexity to scenario development. The tedious nature of working with spreadsheets can consume a significant amount of time for Important Business Service (IBS) owners, pulling them away from higher-level strategic work. This manual data handling not only increases the likelihood of errors but also creates bottlenecks in the workflow, potentially elongating the overall scenario development process.

The resource limitations encountered by Op Res teams intensify these difficulties. With numerous components involved in the operational resilience workflow, it can be difficult to grasp the overall "big picture" when addressing the resilience capabilities in their entirety.

The pressure to present meaningful Key Performance Indicators (KPIs) and metrics to company boards further complicates the situation. Ensuring these KPIs are not only relevant but actionable requires a deep understanding of both the operational landscape and the strategic objectives of the organisation. This often necessitates a robust framework for data collection and analysis, which can be challenging under the constraints of limited resources, time and engagement.

Engaging IBS Owners and Critical Third Parties

Engaging IBS owners remains a critical component of success. The roundtable found that some IBS owners see scenarios as too unlikely and even impossible, despite the Op Res specialists agreeing they qualify as severe but plausible. There is an argument to say that Covid could have been seen as a Black Swan Event, yet pandemics are not a new phenomenon. The increase in geopolitical risk or cyber threats also have the potential to cause severe and prolonged intolerable harm to firms, so educating and engaging IBS owners is vital for building resilience into the operation. Establishing reasonable KPIs allows owners to benchmark performance, while regular updates and feedback loops align them with broader resilience goals. Access to scenario testing fosters engagement and integrates resilience into overall operations.

Third-party transparency continues to be a sticking point. While regulators demand transparency, some third parties argue they are not considered critical services, complicating the resilience equation. This indicates the necessity for clear communication and defined expectations between firms and their third-party vendors. Establishing mutually agreed- upon standards for transparency can help bridge this gap, ensuring that all parties understand their roles in maintaining operational resilience.

Progress Amidst Complexity

Despite these hurdles, the roundtable participants shared encouraging signs of progress. Self-assessment and resource mapping have been instrumental in improving resilience. Testing and lessons learned have helped with engagement and maturity of Op Res frameworks, which are becoming more refined with improving reporting practices. Despite the risk of testing fatigue, regular scenario tests have led to a feeling of enhanced preparedness and a greater understanding of the firm's resilience capabilities.

The roundtable also highlighted the importance of cross-departmental collaboration. By breaking down silos, organisations can leverage diverse expertise and perspectives, fostering a more holistic approach to resilience. This collaborative spirit is essential for establishing a resilient culture that permeates through every level of the firm, ensuring that resilience is not just a buzzword but a core operational value.

The Path Forward: Embracing Innovation and Collaboration

Identifying and monitoring the threat environment is an ongoing challenge, especially in the rapidly evolving business landscape where change and disruption are becoming the norm. The roundtable emphasised the importance of creativity in scenario design, ensuring scenarios are both relevant and challenging while meeting the severe but plausible criteria. The recent Barclays outage is a good example, where the disruption of an IBS occurred at one of the worst times of the year for customers. Were scenario exercises carried out with this in mind? What can we learn from this incident to better prepare for the future? Varying levels of scenario testing maturity was also a point for discussion, where participants expressed a desire for no- notice tests, which could provide more authentic insights into resilience capabilities. It was noted that management buy-in may remain a barrier in some cases.

We must also consider the risk imposed on the wider financial market if an IBS is disrupted. Participants noted that there are some scenarios where the same vulnerability may impact multiple firms, so sharing best-practices through cross- market collaboration to enhance the robustness of resilience strategies is important to them. This collaborative approach not only enriches the scenario design process but also fosters a broader community of resilience-focused professionals, committed to navigating the complexities of operational resilience and the ever-changing risk landscape that firms will continue to face.

Conveying testing results to relevant stakeholders continues to be a challenge. The roundtable emphasised the necessity for enhanced operational resilience awareness overall, along with the importance of discovering ways to share insights from both simulated and real-life situations. Additionally, it highlighted the need to embed resilience into processes and procedures throughout the organisation and beyond the risk and resilience teams. Such awareness allows stakeholders to take ownership of resilience within their departments and remits, reducing the burden on Op Res specialists and fostering a culture of resilience throughout the organisation.

Conclusions

As we anticipate 2025, it becomes evident that operational resilience presents both a complex challenge and a significant opportunity. Insights from the Bolst roundtable highlight challenges around complexity and resource limitations

alongside the importance of ongoing collaboration, innovation, and engagement throughout all levels. Companies are urged to adopt a strategic approach that prioritises resilience as a core business objective, rather than merely a regulatory requirement. This involves investing in technology and tools that streamline scenario development, build resilience engagement, automate mundane tasks, and facilitate real-time analysis, thereby freeing up valuable resources.

Ultimately, the path to achieving operational resilience in 2025 and beyond will be paved by those who are willing to innovate, collaborate, and adapt. As firms strive to safeguard their operations against an unpredictable future, they must remain committed to continuous improvement with a collaborative approach that strengthens both organisational resilience and that of the wider financial services sector.

Future Roundtables

We would like to extend our gratitude to everyone who participated in the first roundtable, whose enthusiasm and contributions made it a delight to host. As this session highlighted the common challenges encountered by Op Res practitioners we will be running more roundtable sessions throughout the year to continue exploring challenges and solutions. There is no fee for attendance and the date for the next session will be released soon, so if you would like to participate, please reach out to us at resilient@letsbolst.com.

We trust that you have found these reflections insightful and hope to see you at our next roundtable!

Josh & Bram

Co-founders, Bolst