The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved the “Guidelines on Operational Resilience” for BSP-Supervised Financial Institutions (BSFIs).
This aims to strengthen BSFIs’ ability to manage and mitigate the impact of disruptions on their critical operations, given frequent natural disasters and fast-paced advancements in technology.
The guidelines also help ensure that financial services will remain available to the public despite prolonged business interruptions, such as those experienced during the COVID-19 pandemic.
This is in line with the BSP’s thrust to foster continuous delivery of financial services to support inclusive and sustainable economic growth.
According to BSP Governor Eli M. Remolona, Jr., “The new guidelines are crucial given the increasing threats to business operations. They complement our previous efforts to strengthen the financial resilience of supervised institutions. Operational resilience ensures the overall safety and soundness of both individual institutions and the entire financial system.”
The guidelines require BSFIs to integrate operational resilience with existing governance structures and related risk management processes, such as operational risk management, business continuity management, cyber resilience, third-party risk management, and recovery plans.
The guidelines also consider the “Principles for Operational Resilience” issued by the Basel Committee on Banking Supervision.
In establishing an operational resilience framework, BSFIs must identify critical operations, which, if disrupted, would cause material harm to their customers, their business, and/or the financial system.
They must also set tolerance levels for disruption or how much disruption they can handle while still delivering critical operations. BSFIs must ensure that they remain within their established limits.
The guidelines will be implemented in phases to ensure smooth transition and implementation. BSFIs must submit to the BSP an accomplished self-assessment questionnaire within one year from the circular’s effectivity.
This will guide them in identifying areas for improvement and preparing action plans for their operational resilience frameworks.
