Boards are aware of the need to change their thinking as banks encounter an increased number of
dangers and difficulties. As a result, boards are approaching operational resilience in an increasingly
novel way.
Internal planning attempts to handle a laundry list of potential problems, including operational
resilience, include next-generation cyberattacks and data breaches, fraud, natural disasters, and the
economic shocks of inflation and interest rate changes. All of these crucial issues necessitate
thorough board monitoring of risk reduction measures.
What about disruptions caused by external customers? Modern consumers want omnichannel
experiences and seamless digital financial services. Traditional banks’ market share is being taken
over by new fintech rivals who can offer these services. The majority of conventional banks need to
catch up. A startling 95% of bank executives “believe their current outdated legacy systems and
technological capabilities are unable to fully optimize their data for customer-centric growth
strategies,” according to the World Retail Banking Report 2022.
The board should give these existential concerns the same amount of attention as cybersecurity
because they are equally important. How do we stay relevant in this quickly evolving environment,
should bank boards ask themselves?
Operational Resilience Redefined
Many board members are becoming more open to a new mentality and approach to operational
resilience as they struggle with new expectations and obstacles. Being a flexible, resilient bank today
involves two interconnected, customer-centered goals:
● We are introducing new services and advantages to stay relevant to clients.
● Preserving client trust through safe transaction execution and data and financial
protection.
Because of this thoughtful approach, operational resilience may be more broadly
understood as a company’s capacity to foster confidence and trust in its capacity to respond
to shifting conditions.
Operational Resilience Issues
Starting with these five steps, bank boards, including their audit and risk committees, can
incorporate this new strategy for operational resilience into their oversight duties.

1. Expand the board’s mandate and outlook to include value generation
   Panels frequently strongly emphasize controlling traditional risk management and compliance:
   preserving value. However, they should also shoulder more accountability for driving bank strategy,
   adding value, and modernizing services to compete with fintech firms. These actions improve
   operational resilience.
2. Adopt a customer-centric perspective
   Directors should approach value development and value protection from the standpoint of the
   consumer. That requires more effort to comprehend client needs and consider how decisions might
   affect customers. Even with subjects that appear to be internally focused, this consumer focus at
   board meetings can affect conversations and questions. Additionally, board members must make
   every effort to interact with clients directly, such as by inviting them to board meetings so they can
   voice their opinions.
3. Give operational resilience more time on the agenda
   Although competitive risks should also be discussed, boards should prioritize risk management on
   meeting agendas. Additionally, strategy and value development discussions should be mixed in
   with risk-focused ones. Board agendas must be reorganized to provide room for these subjects
   because they are crucial to operational resilience.
4. Regularly assess the state of the market
   Boards that only conduct strategic planning once a year may need help to respond rapidly to
   shifting market conditions and client demands. It is necessary to achieve market sensing more
   frequently. One bank board, for instance, conducts a quarterly exercise in which the directors list
   the top five outside factors influencing the current strategy and discuss any necessary changes
   during board meetings.
5. Increase board diversity
   Dynamic, effective boards prioritize diversity, equity, and inclusion. A more varied board provides a
   better knowledge of the various consumer needs. Commissions can add new, diverse viewpoints to
   conversations on value creation and consumer relevance by establishing more representation of
   women, minorities, and younger populations. Board members with backgrounds outside of
   finance can add depth to strategic discussions.
   Change Is the New Normal
   Banks have experienced wave after wave of difficulties and disruptions during the last few years. But
   each hiccup is a chance to advance the organization. Organizations that can do this embrace change
   because they are confident in their capacity for adaptability. Future bank leaders are most likely to
   succeed using an advanced, customer-centric approach to operational resilience that includes risk
   management and value generation.