Bank of International Settlements (BIS) issued an executive summary outlining Operational Continuity in Resolution (OCiR). OCiR refers to a financial institution in resolution’s ability to continue the critical shared services that are needed to maintain or facilitate the wind-down of a financial institution’s critical functions.

The summary notes that digitalization has recently been accompanied by increased reliance on third-party service providers supporting critical shared services, including areas such as data management and storage. This change creates several challenges. Data is now more frequently stored in other jurisdictions and assets may be shared across multiple third-party firms. This could create uncertainty in resolution regarding access to data or legal ownership. The increased digitalisation and reliance on third-party services also increases the chances of a final service involving support from multiple third-party providers with sub-contractors or indirect providers. These arrangements add complexity in service delivery models that may not be adequately captured in operational continuity arrangements.

The summary sets out considerations for approaching operational continuity of critical shared services that are digital. For additional information consult the Financial Stability Board’s Guidance on Arrangements to Support Operational Continuity in Resolution, which includes a recent supplementary note to clarify implementation with the increasing digitalisation of critical shared services.

Click here to read the full executive summary.