Carrie Cook of RiskBusiness describes their new report on COVID-19 and operational resilience.
The global situation surrounding COVID-19 is evolving at a rate none of us could have imagined. But it’s important to remember that though the circumstances we find ourselves in are alien to most of us; contagion itself is not a new challenge for business.
In this timely report, RiskBusiness speaks to risk managers working in some of the world’s largest financial institutions about how they have been planning for an event like this and how their operational resilience plans are standing up to the challenge, especially in light of proposed changes from the UK’s FCA and PRA.
The report also includes input from health and safety experts, System Concepts, on what this means for firms going forward; plus views from Geary Sikich, who wrote a book on the subject of contagion: Protecting Your Business in a Pandemic, in 2009.
Scientists have been warning us for years about the potential impact a pandemic like this could have on the world’s fragile, interconnected economic systems – and businesses clearly weren’t blind to the possibility either. In 2015, post-Ebola, Bill Gates did a TED Talk, watched by millions, entitled The Next Outbreak? We’re Not Ready, where he discussed the importance of scenario planning, vaccine research and health worker training.
More recently, on February 26, 2020, Deloitte surveyed more than 4,200 US executives, asking them which of three typical risk categories – or a fourth “something else” category – would trigger the next economic downturn. 35% selected the “something else” option.
We knew this was coming, so risk managers and business continuity teams should have already included some form of pandemic scenario in their planning. But did they?
COVID-19 will be reflected upon as a Grey Swan event of a lifetime. For those in risk management-related roles, building a more resilient, outward-looking approach to protecting businesses will be essential if we are to survive the next Grey Swan – or indeed Black Swan – event, whatever that may be.
Written at the height of the pandemic, this report contemplates what risks may materialise in the medium term as the COVID-19 crisis unfolds and considers what the new ‘normal’ may look like.
COVID-19 and Operational Resilience was published on 20 March by RiskBusiness and is available here (registration required).