Implementing Operational Risk and Resilience Programs in Financial Institutions: A Project Plan

As financial institutions gear up to meet the Office of the Superintendent of Financial Institutions (OSFI) E-21 guidance and corresponding deadlines for 2025 and 2026, a well-structured and comprehensive project plan is crucial. In this article, we'll outline a robust project plan designed to ensure compliance and enhance operational resilience.

Letter: Operational Risk Management and Resilience — Letter - Office of the Superintendent of Financial Institutions

Guideline: Operational Risk Management and Resilience – Guideline - Office of the Superintendent of Financial Institutions

Project Objective:

Our primary goal is to ensure full compliance with OSFI E-21 guidance by September 1, 2025, and to complete operational resilience programs by September 1, 2026.

Project Phases:

1. Project Initiation (January - March 2025): The journey begins with engaging stakeholders and forming a project steering committee. Developing a project charter that clearly outlines our objectives, scope, and deliverables is a crucial step. An initial risk assessment will help us identify gaps in our current operational risk management and resilience frameworks.

2. Planning and Design (April - June 2025): During this phase, we'll perform a detailed gap analysis based on the initial risk assessment. The development of a comprehensive program design for operational risk management and resilience will include governance structures, risk appetite, and risk management tools. Additionally, we'll establish a scenario testing framework to assess potential disruptions.

3. Implementation (July - December 2025): Implementing governance structures, deploying operational risk management tools and processes, and conducting training sessions for employees are key activities in this phase. Ensuring senior management oversight and independent assurance will be paramount.

4. Testing and Validation (January - June 2026): We'll conduct scenario testing to identify vulnerabilities and validate the effectiveness of our programs. Internal audits and reviews will help us make necessary adjustments based on the testing and validation results.

5. Final Implementation and Compliance (July - September 2026): The final phase involves fully implementing the operational risk management and resilience programs. A thorough compliance review will ensure adherence to OSFI E-21 guidance, and we'll document the entire process and outcomes for future reference.

Key Deliverables:

• Project Charter
• Risk Assessment Report
• Gap Analysis Report
• Program Design Document
• Scenario Testing Framework
• Governance Structure Implementation Plan
• Training Materials
• Scenario Testing Reports
• Validation Reports
• Compliance Review Report
• Final Documentation

Project Timeline:

Conclusion:

The successful implementation of this project plan will not only ensure compliance with OSFI E-21 guidance but also significantly enhance the operational resilience of financial institutions. By systematically addressing each phase, from initiation to final implementation, we can build a robust framework for managing operational risks and responding effectively to potential disruptions.

Investing in operational risk management and resilience is not just about compliance—it's about safeguarding the future of your institution. Let's embark on this journey together and build a resilient financial ecosystem.

STAY TUNED:

I will be publishing a series of posts for each E-21 sub-section of, Outcome 2: Operational risks are managed within approved risk appetite and risk limits.