Ensuring operational resilience in Japan: The rise of new regulations and their implications

Abstract

In 2022, regulators around the world began to take steps to instil greater operational resilience throughout the financial services sector to deal with unforeseen systemic risks. Regulations vary from region to region, but they all mandate an integrated risk management approach that combines multiple aspects of operational risk into a single framework, identifies crucial business services and identifies how to respond in the face of a system failure with enterprise-wide agreement. Financial institutions need urgent and significant assistance in transforming their risk capabilities, as many regulators are calling for enhanced processes and systems by 2025. Many financial institutions are realising that a higher level of collaboration is needed across the enterprise to meet regulatory requirements. Financial institutions need to improve both enterprise-level visibility into risk and compliance activities and enterprise-level crisis response capabilities. This paper analyses the latest developments and provides implications through its primary research in the Japanese market.