Navigating change

Implementation of the revised FINMA circular on operational risks and operational resilience effective January 2024

Salome Forrer
Manager, Financial Services Risk Consulting, PwC Switzerland

Vinay Kalia
Senior Manager, Financial Services Risk Consulting, PwC Switzerland

In the fast-paced world of banking, regulatory changes are a constant challenge that financial institutions must face. The announcement of the FINMA circular 2023/1 on operational risks and resilience for banks has brought about significant changes especially emphasizing the need for operational resilience and the active involvement of board members and executive committees in risk management.

The revised FINMA circular is set to take effect on 1 January 2024, with transition periods of up to two years for operational resilience.

How do you effectively navigate the implementation of the revised circular?

Some of the key guidelines and considerations banks should undertake to effectively implement required changes include:

Gap analysis: Going beyond Risk Control and Compliance to identify and document the gaps. Teams that are impacted and teams responsible for the assessment and implementation are spread across different functions.
Role of Board of Directors and Executive Committee: FINMA makes explicit, that the Board of Directors and Executive Committee will need to understand and be visibly involved in the management of risks. For ensuring operational risk, identify a visible BoD member and senior leader responsible for the operational resilience program.
Implementation plan: Secure resources and budgets to ensure implementation efficiency and manageable costs.
Project management team: Appoint a project manager/ lead, that closely monitors and reviews the delivery of agreed action items and orchestrates regular checkpoints with senior management. Closely track and report on the effectiveness of implemented deliverables.

We are available to further discuss or address any questions that you may have on the implementation of the circular.

#social#