The Bangko Sentral ng Pilipinas (BSP) has called on financial institutions to bolster their ability to withstand and manage shocks or disruptions.
In response, the BSP is finalizing guidelines on operational resilience to ensure uninterrupted service provision and foster inclusive and sustainable economic growth.
BSP Governor Eli Remolona has emphasized the robustness of the country’s banking system, citing ample capital and liquidity.
Remolona highlighted the pivotal role played by banks in maintaining stability during the pandemic, setting the current situation apart from previous crises.
The BSP aims to promote and enhance the capability of BSP-supervised financial institutions (BSFIs) in effectively managing and minimizing the impact of shocks or disruptions on their critical operations.
This objective aligns with the BSP’s commitment to supporting inclusive and sustainable economic growth.
Recognizing the significance of operational resilience, the BSP emphasizes the crucial role BSFIs play in facilitating the smooth functioning of the real economy.
The increasing digitalization and evolving operational disruptions further underscore the importance of their role while posing risks to the financial system.
In light of disruptive events like the COVID pandemic, natural disasters, and cyber attacks, the BSP emphasizes the need for BSFIs to respond and recover efficiently to minimize adverse effects on their ability to deliver critical operations and services.
To ensure uninterrupted critical operations, BSFIs must define their tolerance for disruptions and develop and test corresponding plans.
The BSP expects BSFIs to demonstrate operational resilience by designing a framework tailored to their specific characteristics, including size, nature, complexity of operations, risk profile, systemic importance, and role in the financial system.
Financial institutions must demonstrate their capacity to deliver critical operations despite significant disruptions.
This capacity is vital in mitigating the impact on customers and the overall financial system.
The BSP significantly emphasizes operational risk management, business continuity management, and outsourcing frameworks to strengthen operational resilience.
Recognizing the growing concern over cyber threats, the BSP prioritizes cybersecurity measures.
BSFIs are encouraged to regularly assess cyber-related attacks and incidents in their computing environment, maintaining vigilance regarding the evolving cyber threat landscape.
This proactive approach enables them to implement appropriate measures to enhance cyber resilience.
Furthermore, the central bank expects banks to develop recovery plans that facilitate preemptive actions, preventing breaches of minimum regulatory requirements.
These measures significantly contribute to strengthening the financial resilience of banks.
By adhering to these guidelines, financial institutions can reinforce their operational resilience, fostering overall stability and sustainability within the Philippine financial sector.
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