Operational Resilience: The FCA Sets a New Benchmark for All Firms

Author: Chris Goodeve-Ballard

The FCA released a blog on their website on 15th April concerning Operational Resilience. Given the recent regulatory deadline of 31st March in this area, this in itself is of no great surprise.

There was one notable factor missing in the blog – nowhere in it did it differentiate between in scope and out of scope firms. We’ve seen this type of “mission creep” from the FCA before and in this case, there is some genuine justification. Be in no doubt however that whatever type of firm you are, the FCA will be using their new rules as the benchmark by which they will measure all firms.

Two paragraphs are worth noting in their entirety:

First, they have prepared for severe scenarios in advance. Rather than designing manageable tests guaranteed to succeed, they create challenges so demanding they might ‘fail’ the exercise. These ‘failures’ often generate the most valuable insights, revealing vulnerabilities that would otherwise remain hidden until a real crisis strikes. Their preparation means they aren’t surprised by incidents. Instead, they have prepared their people, processes, technologies, and – crucially – their mindsets, to respond in a way that minimises harm to consumers, markets, and the firms themselves.

Next, they have robust communication plans which are adaptable to various situations, and they regularly test these plans under pressure. They know what and how to communicate with their customers and stakeholders when usual channels are unavailable. 

What does the future hold? Another useful quote from the blog:

With the 31 March 2025 deadline behind us, our supervisory focus is shifting. Firms have laid down the foundations to continue to build resilience by design, and we’ll be looking at how they strengthen their resilience culture by learning from incidents and ongoing scenario testing to remediate any newly discovered vulnerabilities. 

The FCA have now laid down their marker. They want this to be a fundamental part of every firm’s DNA.

Aldbury International is well placed to assist firms in meeting these requirements and have been regularly testing firms and running severe but plausible scenarios as mentioned above.

Contact us on 020 3475 2953 to discuss how we can work with you in this area.