DTCC partners with industry stakeholders on operational resilience initiatives designed to enhance the safety, soundness and security of global financial system. These initiatives are focused on heightening industry participants’ ability to prevent, adapt to, respond to – and recover from – disruptions such as pandemics, natural disasters, cyberattacks or technology failures.
Recently, DTCC contributed its expertise to a new Operational Resilience Questionnaire (ORQ) issued by the International Securities Services Association (ISSA) Operational Resilience Working Group (ORWG), chaired by Alejandra Glass, DTCC Managing Director, Head of Equities Clearing and DTC Settlement Product Management. The scope of the ORWG is to explore how a firm can assess, mitigate and rapidly – but safely – recover from the impact of operational issues by leveraging a consistent methodology.
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DTCC Connection sat down with Glass to gain her insights into the current state of operational resilience and learn more about the ORQ.
DC: What current operational resilience challenges are firms struggling with?
AG: Managing operational resilience is a key challenge for global financial firms and is increasingly becoming part of the regulators’ expectations. Firms are required to provide evidence and attestation around operational resilience standards. However, currently, there is no single “industry-wide” methodology for demonstrating operational resilience that caters to the Securities Services industry. In addition, there is currently no means for responding in a consistent, efficient and sustainable manner to due diligence questions on the topic of operational resilience. In response, the ISSA established the ORWG with the purpose of addressing these gaps.
DC: Why did the ISSA issue its ORQ?
AG: The ORWG issued the ORQ that can be used by the ISSA membership – and the broader Securities Services industry. Information includes entity information, governance, business continuity management systems, third-party provider management, interconnections and interdependencies and technology and cyber protocols. To ensure that the ORQ remains relevant and effective, the document will be reviewed by ISSA on an ongoing basis.
The ORQ provides multiple benefits to the Securities Services industry. First, it enables organizations to assess the operational resilience of themselves, their counterparties or other Securities Service Providers, allowing for firms to identify opportunities and implement actions to improve their operational resilience. Second, it provides operational resilience principles and a consistent and standardized methodology. Third, it provides organizations with the information they need to understand how they mitigate and can rapidly – but safely – recover from the impact of such significant, potentially harmful, operational issues. Further, the questionnaire may aid organizations in responding to requests from supervisors or due diligence requests from third parties.
DC: What role did DTCC play in supporting the ISSA and the ORQ?
AG: DTCC has been a long-standing member of ISSA, providing perspectives across various working groups including asset servicing, operational resilience and emerging technology. This partnership provides the opportunity for DTCC collaboration and thought leadership on topics including operational resilience, cyber security and innovation.