If businesses throughout the world have learnt anything this year, it is that nothing is certain. Business resilience became paramount, whether it be the resilience of supply chains, our health, or our organizational cultures. All businesses want to thrive continuously, but this requires planning and risk management to prepare for the unexpected. Two phrases are used interchangeably but differ in specific ways: business continuity and business resilience.
The capacity for operational resilience remains one of the primary areas of focus for regulators. Banks need to shift their focus away from investing solely in fintech innovation and toward strengthening their capabilities in regtech, which stands for regulatory technology.
Compliance requirements can be met while at the same time supporting cost-cutting efforts when using intelligent technology. Regtech is the application of technology from the next generation to the regulation of financial institutions, many more regulated organisations and in many cases, their suppliers.
That’s why I’m proud to work with Real CGR providing a Regulatory Technology as a Serivce (RaaS) focusing on resilience, business continuity management, data protection, privacy rights management and smart crisis alerting.
What is Business Resilience?
The ISO 22316:2017 standard defines organizational resilience as:
"An organization's ability to absorb and adapt in a changing environment to deliver on its objectives and survive and prosper." It implies absorbing a hit and recovering from it. For a business, this means that when a disruption occurs, you have measures to absorb the blow without causing severe disruption to your operations.
What is Business Continuity?
Business continuity planning (BCP) [RI1] entails developing a strategy to assist businesses in preventing and recovering from potential risks and adverse events. Organizations require Business Continuity Management to ensure that workers and assets can recover during emergencies such as extreme weather and natural catastrophes, active assaults, mental health crises, and threats. These plans keep businesses that provide goods and services running after disasters and calamities.
Business Resilience vs Business Continuity
Resilience and continuity are sometimes contrasted as opposing solutions. However, the debate over "business resilience vs business continuity" may be unnecessary. Successful companies must exhibit both resilience and continuity. Generally spoken, resilience may be seen as a “broader concept” where business continuity planning is a process matching and thriving resilience fully and directly.
Here are some of the requirements for business resilience:
Capability to absorb, adapt and respond to change effectively
Skills, leadership, knowledge, and experience must be diverse.
Good management and governance
Risk management that works
Behaviour that is consistent with a common goal and purpose
Five strategies to build business resilience rather than just business continuity in your team's DNA:
Embrace a Common Organizational Vision: When employees understand the company's overall goals, they may engage with their supervisors to establish individual priorities that generate the desired results and organizational resilience. Employees can develop more inventive approaches to help the organization accomplish its strategic aims if they have a shared vision.
Establish New Leadership Competencies: Consider the characteristics of a good leader in that context as you anticipate future disruptions through scenario planning meetings. Agility, curiosity for RegTech, adaptability, and openness to new ideas are essential evergreen attributes in an uncertain work environment. These characteristics are even more critical for first-line business responsible in financial institutions.
Prepare for Potential Disruptions: Examine all the critical social, political, and economic dynamics that are at work right now. What are some of the possible outcomes? And how might such consequences affect your business processes? If you can predict external disturbances, you can decide how they will affect your firm and create crisis playbooks.
Allow for Greater Internal Mobility: Increase the visibility of your work architecture to employees. Your goal alignment software can assist you in laying this out in an understandable style. Empower employees by showing them their internal mobility alternatives within the firm, particularly possibilities other than stepping into a management post in their department.
Risks should be reassessed, and resources should be redirected: Foster individual managers to keep an eye out for external circumstances impacting their department's objectives, outcomes, and operational resilience. Encourage change anticipation and reaction as an organizational muscle. At each level of decision-making, regularly evaluate your scenario plans and potential challenges.
Why Do You Need Business Continuity and Resilience supported by RegTech?
Business continuity guarantees that firms have the resources, process , technology and practices to continue operations in the event of any adverse physical or non-physical event like cyber-outage, adverse weather, disease outbreak,…On the other hand, business resiliency denotes that a firm has built long-term agility and flexibility into the fabric of its culture.
And you'll need both targeted business continuity and general business resilience to ensure your company prepares for anything coming your way.
To stay on top of today’s operations and regulatory landscape that’s complex and ever-changing, use Regulatory Technology to assist your business! On top of reaching preparedness and compliance, it will create more time for addressing people and culture. Let us keep in mind that these are of paramount importance in any risk-management initiative.
Last but certainly not least, ESG (Environmental, Social and Governance) is finding its way into regulations. The implementation rules and reporting obligations for any bigger organization, particularly finance and insurance, are massive. Here, RegTech unburdens and is a leverage to ESG compliance.
