Operational resilience will continue to be a key regulatory focus for the Asia Pacific (AP) financial sector throughout 2023 and beyond. All businesses and regulators in the area continue to place increased emphasis on operational resilience and the management of disruptions to critical financial services. Although some AP jurisdictions may lag the advancements achieved in other geographies, we see that the pace is increasing with regulatory pressure forcing the region to place more emphasis on all aspects of operational and cyber resilience.
There are several factors driving the need to improve operational resilience in the Asia Pacific region. The acceleration of digitalisation which took place during the COVID-19 pandemic is very significant as it resulted in an increase in partnerships between financial firms and third-party operators. This has driven dependencies on a much wider range of suppliers and stakeholders; however, operational resilience directives place an emphasis on the mitigation of all 3rd party risks for financial operators. In addition, the recently complicated geopolitical environment, and the potential economic downturn that could result from any significant disruption to financial services within the AP jurisdictions are also key drivers of the need for an increased focus on operational resilience and improved regulation.
Although there are regional variations, March 2024 is a common deadline for many AP region regulatory directives to enter into full force. The FMA Financial Market Infrastructures Act 2021 of New Zealand is just one example which follows this timeline. We have seen many additional directives following suit. For instance, the standards for designated Financial Market Infrastructures (FMIs) which were issued on 27 July 2023 under section 31 of the Financial Market Infrastructures Act 2021 by the Reserve Bank of New Zealand and the Financial Markets Authority also come into effect starting from 1 March 2024. Clearly there is a sense of urgency across the region intended to ensure that affected firms have implemented all necessary procedures to facilitate operational resilience within this timeframe.
Cristie Software can simplify key aspects of financial system infrastructure recovery to help meet the requirements of new operational resilience directives. Financial systems involve complex interdependent IT configurations built with redundancy to provide maximum availability. Implementing, supporting, and securing these systems presents challenges due to their vast scale. For example, an isolated service such as payments may be supported by several financial companies with thousands of server instances across many different geographies. Cristie Software’s recovery and replication solutions provide a range of methods to facilitate bulk server mapping and recovery which ensures that large scale deployments can be recovered in the right sequence and within descried timeframes.