UK-based financial regulators have published a set of requirements in a bid to increase operational resilience in the financial sector.
The move aims to bolster the capabilities of the banks to resume services within a timeframe following any disruption.
The Bank of England along with Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) published a shared policy summary and co-ordinated consultation papers (CPs) on the proposed requirements.
The proposals require the banks to identify key business services, which if affected can threaten their viability.
Accordingly, the financial institutions will set impact tolerances for such services. The impact tolerances will define the maximum level of disruption they would tolerate in terms of affected customers, time or business volumes.
Subsequently, the financial institutions will take appropriate measures to remain within their impact tolerances and devise backup plans.
During disruptions, they are also expected to assist consumers with alternative means to access services.
FCA chief executive Andrew Bailey said: “It is in the public interest that a resilient financial system is able to supply the most important services with minimal interruption even during severe operational events.
“The proposed new requirements are aimed at achieving this outcome.”
Notably, in the recent times, several UK-based banks faced IT crashes including the infamous IT meltdown at TSB.
Currently, the policy proposals are open for consultation that will run till April 3 2020.
Alongside, the regulators also published a consultation paper on outsourcing and third-party risk management.