Operational Resilience: From “Uptime” to a Board-Level License to Operate
Operational resilience becomes an urgent priority
In 2026 and beyond, operational resilience will become a defining measure of banking fitness: the ability to keep critical services running through disruption, protect customers from harm, and preserve trust under stress. Recent incidents show that the biggest disruptions are increasingly triggered by shared dependencies - third-party platforms, software supply chains, and common infrastructure - rather than isolated internal failures. When these dependencies break, the impact is immediate: service unavailability, failed transactions, customer anxiety, complaint spikes, and rapid reputational erosion.
What is structurally changing is the operating context. Banks are scaling digital volumes, expanding partner ecosystems, and modernizing platforms while customers expect always-on access. At the same time, regulators are tightening expectations around how banks define “important business services,” set impact tolerances, test severe-but-plausible scenarios, and manage third-party concentration risk. The practical message for banking leaders is clear: resilience can no longer be treated as an IT reliability program - it must be managed like credit risk or liquidity risk, with explicit governance, measurable tolerance, and continuous testing.
This is a structural break. As banking becomes more composable and ecosystem-driven, resilience must be designed as a system property, not an after-the-fact control layer.
Authors:
NNP, AVP, Senior Product Line Manager
Ravi Venkataratna, Senior Industry Principal
Srihari B A, Senior Manager - Solution Consulting
Resilient Delivery of Critical Services
Across jurisdictions, regulators are converging on a common expectation: banks must continue delivering critical services through disruption and recover within clearly defined tolerances. While supervisory language often references technology risk, the business objective is straightforward: protect customers and markets from service outages that impact payments, deposits, cards, lending, digital channels, and treasury operations.
Regulations in the UK, EU, US, Australia, and India consistently emphasize the same building blocks: identify important business services, define impact tolerances, map end-to-end dependencies (including key vendors and utilities), conduct severe-but-plausible scenario testing, strengthen incident response and recovery, and improve governance, accountability, and reporting. For example, UK PRA/FCA guidance pushes firms to operationalize “important business services” and prove they can remain within tolerances; EU DORA formalizes oversight of critical third-party service providers and raises expectations for resilience testing and incident reporting; and US interagency guidance strengthens end-to-end third-party risk governance across the relationship lifecycle. These requirements converge on one practical outcome: resilience is now a demonstrable, auditable capability, and banks must be able to evidence continuity of critical operations under disruption.
4P Framework for Managing Incidents in 2026
A pragmatic way to operationalize resilience mandates a “4P” framework - one that translates regulatory language into day-to-day execution.
1) Prevention (reduce the probability of disruption)
Prevention focuses on stopping operational stressors from becoming incidents. The emphasis is on: ICT risk management, secure change management, capacity and performance engineering, vulnerability management, and third-party risk governance. This includes ensuring controls are embedded in release pipelines (testing, rollback discipline), and ensuring dependencies meet resilience requirements through contracts and monitoring, aligned with regulators’ third-party expectations.
2) Preparedness (recover fast when disruption happens)
Even with robust preventive measures, incidents may still occur, so preparedness focuses on minimizing impact duration and customer harm. It includes business continuity planning, disaster recovery (DR), redundant capacity, isolation patterns to contain blast radius, and runbooks that enable rapid restoration. Regulators increasingly expect resilience testing and readiness to remain within impact tolerances - not theoretical plans.
3) Pay Attention (detect early warning signs before failure)
Systems rarely fail without signals. This pillar prioritizes observability, continuous monitoring, anomaly detection, and early warning indicators - so stress is addressed before it breaches tolerance. The RBI guidance explicitly calls out metrics, early warning information, and scenario analysis for critical services as part of operational resilience controls.
4) Preside Over (govern, learn, and continuously improve)
Operational resilience is an ongoing journey. Preside Over covers incident response governance, root-cause analysis, audit and control assurance, corrective actions, and institutional learning - including learning from industry incidents and vendor failures. The objective is a “closed loop” where incidents directly improve architecture, runbooks, vendor controls, and engineering standards.
Making Resilience Real Across Domains
- Infrastructure resilience (five layers of durability): Resilience must be designed from physical/compute through data and platform services, covering compute infrastructure, databases, cached data, messaging/event stores, and container registries. In practice, banks are often strongest on compute redundancy and database backup/DR, and less mature on resilience patterns for eventing/messaging and platform supply chain components.
- Information security resilience: Security resilience spans deployment security (cloud workload hardening, secure credential storage, continuous certification/audit), data privacy and regulatory compliance, and protection of data at rest and in transit. DORA both elevate third-party dependency and ICT risk controls, making “secure operations under disruption” a core resilience requirement.
- Application resilience: Applications become resilient when they are engineered to handle failure in code - through graceful degradation, disciplined timeouts/retries, circuit breakers, idempotency, load shedding, safe releases, and continuous resilience testing - so customer-critical journeys remain stable even when dependencies falter.
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Operational Resilience Readiness: Uneven Progress Across Regulatory Regimes
- EU (DORA, applies March 2025): 50% of firms targeted full compliance by end-2025; 38% expect to reach it in 2026. Readiness is strongest in incident management (48% fully compliant), while testing (8%) and third-party risk management (8%) are lagging.
- UK (FCA–PRA–BoE Operational Resilience): Transition period ended 31 March 2025. Regulators expect firms to operate within impact tolerances now, supported by Board-approved plans and ongoing supervisory assessment.
- Australia (APRA CPS 230, commences 1 July 2025): Over 80% of entities expect to be substantially compliant by 1 July 2025. Non-SFIs received a 12-month extension for business continuity and scenario analysis requirements.
- India (RBI-led OR + cyber resilience uplift, 2025–2026): bank.in adoption at 889 domains across 747 banks; new digital payment authentication effective 1 April 2026; outsourcing directions require legacy IT outsourcing contracts to align by 10 April 2026 (or renewal, earlier).
- Canada (OSFI E-21): Banks expected to meet key expectations by 1 Sep 2025, with full adherence by 1 Sep 2026; scenario testing for all critical operations by 1 Sep 2027.
- United States (supervisory expectations): Readiness signal is supervisory and market-driven rather than deadline-based: OCC has elevated operational resilience and third-party risk as priorities (2025) and issued an RFI on core/essential third-party provider barriers with comments due 27 Jan 2026.
The Road Ahead: Banks as Resilience-native Orchestrators
From 2026 onward, leading banks will treat resilience as a built-in property of digital business - measured through impact tolerances, proven via testing, and enforced across third-party ecosystems. The most resilient institutions will be those that industrialize the 4P loop across infrastructure, security, and applications: preventing avoidable incidents, preparing for rapid recovery, paying attention through pervasive observability, and presiding over continuous improvement through disciplined governance.
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