Operational Resilience in Financial Services: Six Months On

In May, we published an article about the situation surrounding the Financial Conduct Authority’s prioritisation of “operational resilience” and what it could mean for the technology roadmaps of UK financial services companies. The time since has been incredibly turbulent, and like many areas of the business world, deadlines on these important legislative decisions have become flexible and prone to change.

However, despite the current world stage, the importance of operational resilience in the finance sector has not rescinded this year – if anything, it has become even more vital. Systems that handle critical areas of finance such as loans, investments or payments simply do not have room for error – and if there is an issue, the resulting downtime period mustn’t be more than the blink of an eye.

Unpredictability is something we have all faced this year – technology leaders of the UK’s finance sector have certainly felt the disruption to their digital roadmaps. For example, CBILS (the UK’s coronavirus business loan scheme), has been a quickly conducted test for so many regulated finance businesses. Some have struggled to adapt to change quickly – and in this case, speed of adoption is off the essence. Yet, others have easily adapted to offering the scheme, hitting the ground running once they were approved. Part of the difference has been their pre-existing technology infrastructure – agile FinTechs with scalable systems can pivot more easily than businesses weighed down by monolithic platforms.

Agility isn’t an easy solution to this situation. The finance sector is covered in red tape as a necessity. For agile teams this can hold back fast delivery greatly – the trade off between compliance and speed is not exactly negotiable. The solution cannot be summarised as every business is different but observing the wider issue rather than focusing on constraints helps clarify the true importance of agile. Inflexible systems are more prone to crashes when unexpected events occur – this presents a risk. Monolithic platforms pose an inherent risk of potential chaos in one side of the system when changing another part of it.

Every conversation surrounding the need to improve operational resiliency eventually boils down to firstly people, then processes and finally technology. A business struggling with resiliency that makes plans to “invest in technology” cannot find success without the right cultural mindset supporting that digital shift. Everybody – not just the development team and CIO or CTO – must be completely on board with change before it can succeed.

However, any technology leader that is faced with legacy systems and resilience issues will tell you that building a team to tackle the challenge is not easy. For the most technology-led businesses, finding and retaining experienced development talent is difficult. In turn, businesses that need to scale teams which will be responsible for older and less exciting technology is another magnitude of problematic.

It’s not an impossible problem. Building teams takes time, but once the right people are in place – people who are passionate about solving business problems and driving positive change – transformation is in reach. It is more evident than ever that a team can be built and scaled remotely, which provides finance businesses opportunity to access development skills from locations across the world.

Building a culture within these teams and growing that culture across the entire business is possible with the right processes in place. Agile teams achieve fast delivery by running regular and brief meetings, sharing blameless discussion about challenges and constantly promoting a culture of innovation via asking questions and sharing ideas. This can lead to amazing change for finance businesses that need to be ahead of regulatory demands. Once everybody understands exactly how a system needs to be built in the context of its stakeholders, they can make the right decisions toward improvement much more quickly.

Looking ahead to next year, it is likely we will only see more emphasis on the topic from the UK’s financial regulatory bodies. Despite the myriad challenges that 2020 has put in front of businesses and their development teams, operational resilience remains an undeniable priority. Systems must be tested to destruction, and either improved or rebuilt for the purpose of future security, robustness and compliance. Embracing and investing in digital change must be top priority for finance businesses in 2021, and this starts with building high-performing teams that can drive the evolution required.