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FORTRESS
2020
TRENDS/
PREDICTIONS
REPORT
+44(0)20 3858 0099 info@fortressas.com
FORTRESS 2020 Trends/Predictions Report 2
THE DEFINITIVE 2020
PREDICTIONS GUIDE FOR
OPERATIONAL RESILIENCE
Financial Resilience has been a key focus area for with the potential to undermine the safety,
the Financial Services Industry and its regulators stability and integrity of firms or the global
since the challenges of 2008. financial system on a broader basis.
The Bank of England ‘s discussion paper entitled As the nature of risk has evolved over time,
“Building the UK Financial Sector’s Operational Operational Resilience has taken on greater
Resilience”, published in conjunction with significance for the regulators. The openness
the Prudential Regulation Authority (PRA) and and complexity of the financial ecosystem and
Financial Conduct Authority (FCA) advocated the likelihood that breakdowns will happen
that Operational Resilience underpins Financial means that firms must do more than monitor and
Resilience. This, and its recommendations mitigate risks, they must also focus on building
on processes, policy and allocating responsibility, resilience to ensure that they can continue to
raised the focus on Operational Resilience to deliver Business Services when an incident
the same level that had previously been placed occurs. The Bank of England also advises that
on Financial Resilience in the preceding decade. plans are put in place on the basis that these
incidents will occur, rather than might occur.
In today’s highly interconnected and digital
world, failures can have far reaching implications
WHAT ARE THE BIGGEST
TRENDS AND PREDICTIONS
FOR OPERATIONAL
RESILIENCE IN 2020?
At FortressAS, Operational Resilience is at
the heart of everything we do. We were
formed specifically to answer the cyber
and operational risk and resilience needs
of modern businesses.
Our management team have had a long history
of involvement in the industry and we have
therefore seen many changes over the years
in Operational Resilience. The threats have
changed over time as have the requirements
of the regulators.
This year, in discussion with leaders in the
Financial Services Industry we have identified
5 key trends that we will see in 2020 relating
to Operational Resilience:
FORTRESS 2020 Trends/Predictions Report 3
01 DP118 WILL DRIVE
ACTIVITY FORWARD
The Bank of England’s discussion paper and subsequent consultation papers are
shaping the financial services industry view of Operational Resilience.
In 2019 many companies reviewed their become disconnected from their customer
Operational Resilience and continuity strategy outcomes. The regulators then jumped on the
from an infrastructure perspective only, but back of this because their focus is protecting
in 2020 this shifts towards this being reviewed the consumer and the wider market structures.
in line with DP118. There will be a change
When you compare the banking sector with
in approach from the more traditional business
other sectors, they are far more advanced in
impact analysis to looking at the business
some areas but woefully inadequate in others.
services that Customers consume and work
Due to the regulatory scrutiny they are under
backwards from there.
many on the senior management team give their
attention to developing resilience, and rightly so,
but some of the processes they are implementing
”
have already been in existence for a long time.
This kind of end to end view of resilience and
keeping the customer in mind has often been
set up by organisations in response to issues
This has been a long time in their supply chain.”
coming and its history goes Peter Scott, Chief Admin Officer at Nomura Asset
back to the big IT failures that Management, comments: “At Nomura Asset
Management we are seeing a move towards
made the financial industry more alignment with DP118 and have started
and banks sit up and take note to increase the scope of what we look for in our
of their operational resiliency. business analysis.
We also look at who our counter parties are to
identify the key ones and reach out to them to
Fin Curror, Executive Director at Morgan engage them in discussions around what their
Stanley, agrees: “It is certainly true that many business continuity plans are.”
organisations are reviewing their operational
resilience needs and business continuity DP118 will very much drive activities forward
requirements, and 2020 will see this happening in business continuity and operational resilience
more in line with DP118. in 2020 and beyond, and those organisations
who respond to it will be one step ahead of their
2019 has seen many organisations responding competitors as they focus on building strong
to DP118 and deciding how they are going to resilience capabilities.
change in line with it, and we will start to see
those changes coming to the forefront in 2020
and beyond.”
James Crask, Head of Resilience Advisory at
Marsh, also agrees: “This has been a long time
coming and its history goes back to the big IT
failures that made the financial industry and
banks sit up and take note of their operational
resiliency. Those resilience capabilities have
FORTRESS 2020 Trends/Predictions Report 44
02 RESPONSES ON
“SHOW TO ALL”
In today’s connected world, customers will judge a business’s values
by how it communicates during a disaster or crisis.
Customers will judge a business’s values by how and if you consider share performance to be
it responds to a disaster or crisis. Social media a measure of an organisation's trust and the
now means “there is nowhere to hide”. In today’s amount of trust that the organisation has,
24/7 connected world customers can easily it is a good metric to measure. It was clear
vent their frustrations on social media against that businesses that handled their crises well
organisations and having a strong Operational were rewarded with much higher levels of
Resilience approach with this today is a must. share performance and those levels could be
sustained for the long term. When you look
Fin Curror, Executive Director at Morgan Stanley,
at the characteristics of the organisations that
comments: “We will definitely see more of how
had done well versus those that had not done
resilient businesses are by how they respond
quite as well were characterised by good post-
to a disaster or crisis. Social media will play
crisis behaviours. This reinforces the prediction
a greater part and many organisations will need
that the consumer will reward and hold
to have solid plans in place for how they will cope
in high regard those businesses that are good
with online comments in the event of a disaster.
at dealing with disasters.”
More robust plans will need to be put in place
and followed to ensure that businesses stay as Social responsibility is a concept that every
resilient as possible against disasters and how organisation should adhere to, but being able
those disasters are responded to by organisations to convey a positive corporate sentiment across
online will be crucial.” multiple channels that include social media
can present real challenges. However, getting
The Bank of England and FCA also made it
this right can also impact positively on sales
clear in their discussion paper and subsequent
and customer loyalty. With customer service
consultation paper that they also expect
expectations rising year after year, consumers
firms to have robust internal and external
frequently look to brands to create seamless
communications plans especially when it comes
and consistent messaging, even when in crisis,
to how they respond to a disaster or crisis.
across all media. How these channels are
James Crask, Head of Resilience Advisory managed in the event of a crisis or disaster can
at Marsh, comments on this accordingly: make or break an organisation.
“We undertook some research last year looking
at the impact of prices on share performance,
FORTRESS 2020 Trends/Predictions Report 5
03 TIME
FOR ACTION!
After the distractions and uncertainty of 2019, along with the reviews
of high-level business services as a response to the BoE discussion paper,
2020 will be a year of action.
After the release of the Bank of England’s Fin Curror, Executive Director at Morgan
discussion paper in 2018, where much Stanley, agrees: “2020 will definitely be
debate took place as to its contents, 2020 a year of significant change, and it is likely
will be a year of action as financial institutions we will see this change spreading into 2021
race to implement much of the content of the and beyond. Brexit and the recent General
paper to help make them more operationally Election campaign has provided much
resilient. With many distractions and uncertainty, uncertainty which does not show any sign
particularly around Brexit over the last three of slowing down any time soon, so 2020
years, 2020 will see some significant changes. and beyond will be years of significant action.”
To add weight to this prediction,
”
the FCA launched a consultation paper (CP)
in December 2019 which provided clarification
on its proposals. In this consultation paper the
...the Bank stated its intention Bank stated its intention to bring about change
in how the industry responds to and thinks about
to bring about change in how
operational resilience, which is informed and
the industry responds to and driven by the public interest.
thinks about operational resilience
which is informed and driven
by the public interest.
FORTRESS 2020 Trends/Predictions Report 6
04 CYBER RISK
INCREASE RELENTLESS
Banks and financial institutions will need to be more cyber resilient to protect
their businesses from risk.
Although organisations will need to reduce link in cyber defence. The Bank and FCA are
their cyber risk, the real necessity here will be pointing out that cybersecurity risks need not
to develop operational resilience. That is, if and be external and we must also look closely at the
when they do get hit, organisations should have Insider Threat when it comes to managing risk.
plans in place to keep their business moving
It is important to minimise the likelihood and
in this event.
impact of a cyber-attack, but many feel that you
The cyber security aspect of overall operational cannot safeguard against everything. Something
resilience is a key area that many organisations will eventually slip through the net and
intend to focus heavily on in 2020. The response organisations need to be sure that they can deal
to a cyber-attack is very closely related to with the impact of an attack.
an organisation’s existing continuity and
Being cyber resilient is something that all
resilience plan, and these plans do not tend
organisations should take seriously, especially
to be separated.
financial institutions, and should be part of their
From the beginning of Q1 2020 many overall business continuity and operational
organisations intend to introduce additional resilience plans.
safeguards to enhance the internal training of
their staff, as people are still the biggest weak
05 TESTING,
TESTING!
2020 will be a year to test new processes in the light of these reviews.
The culmination of this action and activity will will always be ways in which the recovery
be testing. In the light of this, the primary process can be improved. The aim of testing
focus will be on proving that the provisions is to uncover resilience gaps and to enable
and processes that organisations have investment decisions about resiliency provision
in place will prevent operational incidents from to ensure that critical business services are
impacting consumers, financial markets and UK provided even when severe disruptive events
financial system. happen.”
The regulators are clear that testing is integral
Testing will become the cornerstone
to the operational resilience process and
of business continuity and operational
that firms must demonstrate and document
resilience in 2020, and those who have rigorous
their testing procedures to prove their ability
testing programmes in place will reap the
to meet impact tolerances.
rewards as the year progresses.
Andrew Lawton, CEO of FortressAS explains:
“We encourage our customers to test as thereFORTRESS 2020 Trends/Predictions Report 7
FINAL THOUGHTS/
CONCLUSION
Fortress Availability Services Limited (FortressAS),
CIR Specialist Provider of the Year 2019, Customer satisfaction is the
was formed specifically to answer the Cyber
driving force behind the FortressAS
and Operational Risk and Resilience needs
of modern businesses. team’s work, and they the winning
With a focus on supporting the Financial entry to CIR Specialist Provider
Services Industry, FortressAS has built the most of the Year 2019 was a result
advanced work area recovery facility in the
of Customer commendations.
UK. The innovative and flexible resiliency
and recovery services, supporting many banks,
asset managers and insurers have this centre
as their foundation.
ABOUT FORTRESS
AVAILABILITY SERVICES
Fortress Availability Services Limited (FortressAS),
CIR Specialist Provider of the Year 2019,
was formed specifically to answer the Cyber
and Operational Risk and Resilience needs
of modern businesses.
With a focus on supporting the Financial
Services Industry, FortressAS has built the
most advanced work area recovery facility in
the UK. The innovative and flexible resiliency
and recovery services, supporting many banks,
asset managers and insurers have this centre
as their foundation.
Customer satisfaction is the driving force behind
the FortressAS team’s work, and they the winning
entry to CIR Specialist Provider of the Year 2019
was a result of Customer commendations.Contact Us Fortress Availability Services Limited • City Reach, 5 Greenwich View • London E14 9NN
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