Use our year 2 insights and observations to strengthen your firm’s next operational resilience self-assessment. Focus on what you can deliver now, how you manage disruption, and how you support conclusions with evidence.
Firms have made good progress since the operational resilience transition period ended in March 2025. We continue to see strong governance, mapping, testing and remediation arrangements across the sector.
But firms face evolving threats, such as cyberattacks, technology failures, third party outages, data integrity issues and broader geopolitical events. At the same time, an increased reliance on shared infrastructure, digital service providers and emerging technologies could all change the nature, speed and impact of disruption.
Our latest findings from our review of firms’ 2025 to 2026 operational resilience self-assessments suggest that firms could do more to demonstrate what they can deliver now during severe but plausible disruption, rather than relying on planned remediation, transformation programmes or future investment.
This publication builds on the operational resilience insights we published in March 2026. It does not replace those findings. Instead, it focuses on how firms can evidence resilience in practice.
We are sharing these observations to provide insight into themes arising from our review of firms' operational resilience self-assessments. Our observations are not new requirements. Firms may find them useful when considering their operational resilience arrangements and self-assessments.
The stronger self-assessments we reviewed explain:
- What vulnerabilities remain.
- How disruption could cause harm.
- What evidence supports the firm’s resilience position.
- How Boards and senior management are using this information to make decisions.
- How recovery priorities could be affected if multiple services, firms or market participants are disrupted simultaneously.
Based on our latest findings, the main area for development is improving the quality of evidence. Stronger self-assessments are more likely to include sufficient evidence to demonstrate that they can:
- Respond to severe cyber disruption.
- Manage risks from material third party dependencies.
- Reduce the impact of disruptions to their important business services to avoid intolerable consumer harm and reduce threats to market integrity even if they can’t fully recover within the impact tolerance.
- Explain and support their current resilience position and the assumptions behind it
- Identify, explain and manage any residual risks and capability gaps, and the actions being taken to improve resilience.
1. Who this applies to
These observations are most relevant to firms in scope of our operational resilience rules in SYSC 15A.
They may also help other firms assess how disruptions to their services could affect consumers, clients, market integrity or confidence in the financial system, and how to minimise their impact so as not to cause intolerable harm to consumers or threats to market integrity.
2. Our findings
Below we’ve set out examples of good practice and areas for improvement, based on our latest findings. If there are themes from our March 2026 publication that are still relevant, we explain what firms can consider now as part of their next self-assessment.
Important Business Services (IBSs), impact tolerances and maintaining delivery during disruption
Firms must identify their important business services, set impact tolerances for each of them, and regularly review both. They should also be able to explain how disruption to those services could cause intolerable harm to consumers or threaten market integrity.
Examples of good practice
- More mature firms explain how impact tolerances relate to the disruption of important business services, including how they would prioritise activity and protect customers or market participants during prolonged disruption.
- Clearer self-assessments explain why the firm identified each important business service, how disruption could cause intolerable harm to consumers or threaten market integrity, and how the firm has calibrated impact tolerance.
- Stronger approaches use both time-based and non-time-based measures. The former state a simple amount of time after which harm would be caused, whereas the latter include customer numbers, transaction volumes and values, financial and non-financial harm indicators, outstanding work and, where relevant, customers in vulnerable circumstances or those who cannot access digital alternatives. Including these non-time-based metrics in the self-assessment helps readers to understand how response and recovery actions will reduce the impact of the disruption and whether they can avoid intolerable harm to consumers and threats to market integrity.
- Firms need to review their compliance with the operational resilience rules in SYSC 15A at least annually, or if there is a material change to the firm’s business or the market in which it operates. The better firms we reviewed use any material change to their business, technology, supplier or operating model as a trigger for reconsidering if their important business services, impact tolerances and mapping are still appropriate.
- This means that they’re able to identify when disruption may become intolerable and deliver the key aspects of their services (for example, by prioritising vulnerable customers or using communications to reduce the threat to market integrity) so that consumers or market participants are protected.
Examples of poor practice
- Some firms point to future improvements or transformation plans without explaining whether they can remain within impact tolerance now.
- Some firms do not clearly explain the point at which disruption would cause intolerable harm to consumers or threaten market integrity, or how this differs across customer groups, clients, market participants and vulnerable customers.
- Some firms rely too heavily on time-based impact tolerances without explaining the wider harm indicators that would inform decisions during an incident.
In March 2026, we observed that stronger firms had clear methodologies and rationale for IBSs and impact tolerances. The latest findings build on this by focusing on whether firms can evidence resilience in practice, including during disruptions.
Mapping resources and dependency risk
Firms must identify and document the people, processes, technology, facilities and information needed to deliver each important business service. This should include dependencies on third parties, group services, shared infrastructure and other arrangements that could affect the firm’s ability to remain within impact tolerance.
Examples of good practice
- Stronger firms use mapping to identify dependency risk across third and fourth parties, group services, financial market infrastructures, shared platforms and technology services.
- Effective mapping shows how important business services are delivered from end to end and how disruption to people, processes, technology, facilities, information or dependencies could affect delivery of important business services.
- More mature approaches use mapping outputs to inform testing, vulnerability management, remediation prioritisation, investment decisions and Board reporting.
These give firms a clear view of how important business services are delivered from end to end, and how dependencies could affect this if they were unavailable or disrupted.
Examples of poor practice
- Some firms rely on assumptions about third party, group or shared service resilience without showing how they have tested or challenged those assumptions.
- Some self-assessments do not explain how dependency failure would affect customers, clients, market integrity or the firm’s ability to remain within impact tolerance.
- Some mapping remains too focused on technology, without properly covering people, processes, facilities, information and operational dependencies.
This theme was also raised in March 2026. Our latest observations build on it by highlighting how dependencies may affect firms’ ability to remain within impact tolerance during disruption.
Scenario testing and demonstrating resilience in practice
Firms must develop and maintain testing plans that show they can remain within impact tolerances for each important business service through severe but plausible disruption. Testing should be informed by the firm’s risk profile, vulnerabilities, dependencies and previous incidents.
Where firms discover that there are scenarios they would currently be unable to fully recover from within impact tolerance, stronger firms continue the analysis beyond identifying the recovery limitation.
Firms need to identify when disruption could cause intolerable consumer harm or threaten market integrity, and assessed how response options could prevent, minimise or delay those impacts.
We observed stronger firms minimise the impact of disruptions to avoid intolerable harm to consumers or threats to market integrity. This was evidenced through contingency arrangements, prioritisation decisions or minimum service arrangements. More mature firms go on to consider whether their scenario testing explains the service outcomes that would need to be maintained during severe cyber disruption or material third party failure, and how they have tested assumptions about recovery, suppliers and workarounds.
Firms that use non-time-based metrics to inform their impact tolerances demonstrated a clearer understanding of how response options would prevent, minimise and/or delay the impacts to consumers or markets. This enabled firms to make more informed prioritisation decisions across elements of their important business services – for example thinking about transaction volumes and values, types of end user and how their response would mitigate any intolerable harm to consumers, or threats to market integrity. Stronger analysis also considered how this would play out in the markets they operate in, if there’s more than one firm affected by a disruption.
Examples of good practice
- More mature firms use testing to demonstrate whether each important business service can remain within impact tolerance, not just whether existing plans and procedures work.
- Mature firms test how disruption to interconnected services or shared dependencies could affect multiple important business services at the same time, and how this may create cumulative harm or competing recovery priorities.
- Effective testing considers the possibility of major cyber disruption, data integrity issues, third party failure, group service disruption, loss of key staff, degraded communication channels and unavailability of production environments.
- Stronger self-assessments explain assumptions, evidence supporting recovery times, limitations of workarounds and risks that remain after testing.
This means that firms have a clear view of their current capabilities and the priority areas they need to invest in.
Examples of poor practice
- Some firms rely on manual workarounds without showing how these workarounds would operate during a severe disruption, including whether they are scalable for a large number of impacted users and/or services, particularly over an extended period.
- Some firms rely on assumptions about supplier and/or group service providers’ operational resilience or cyber recovery arrangements without showing how they have tested them against severe but plausible disruption.
- Some firms’ self-assessments do not explain how they would maintain essential services so that the potential for intolerable harm to consumers or threats to market integrity were minimised if full recovery within the impact tolerance was not possible.
- Some firms do not demonstrate that their testing is sufficiently severe or aligned to the vulnerabilities and dependencies that the mapping identified.
- Some firms state that they would be able to recover from every scenario within impact tolerance, but do not show evidence to support this.
Severe but plausible testing was raised previously. The latest findings suggest that stronger firms focus more on whether testing demonstrates resilience in practice, including whether their assumptions, workarounds and recovery strategies remain valid under stress.
Vulnerability identification, remediation and validation
Firms' mapping and testing should identify vulnerabilities that could prevent them remaining within impact tolerance. Firms should be able to show how vulnerabilities are prioritised, remediated, validated and re-tested.
Examples of good practice
- Stronger firms validate remediation and re-test where needed, rather than treat closing an action as enough evidence that their resilience has improved.
- Clearer self-assessments distinguish between remediated, open and risk-accepted vulnerabilities, and explain how they can recover despite them.
- Effective remediation approaches include owners, timelines with target closure dates, prioritisation criteria, funding decisions and governance routes.
- This means that firms can distinguish completed actions from improvements that have demonstrably increased resilience, understand the residual risk from open or risk-accepted vulnerabilities, and prioritise further remediation and funding decisions.
Examples of poor practice
- Some firms describe planned remediation but do not clearly state whether they can remain within impact tolerance before it is complete.
- Some firms do not show enough evidence that remediation has been validated, re-tested or considered by the Board where residual risk remains.
- Some firms report few or no vulnerabilities, but don’t provide evidence to show how they reached those conclusions.
In March 2026, we shared observations relating to how firms identify, remediate, track and close vulnerabilities. These latest findings build on that. We focus on whether firms can show that remediation has improved resilience, not only that actions have been completed.
Communication plans and strategy
Firms must maintain an internal and external communications strategy that can support clear, timely and relevant messaging during operational disruption. Communications should help reduce harm, support customers and market participants, and support escalation and decision making.
Examples of good practice
- More mature firms test communications as part of their operational resilience scenarios, including what they would do if their usual channels were unavailable and they needed to communicate quickly.
- Stronger firms consider how they would make sure their communications supported customers in vulnerable circumstances, customers unable to access services, market participants and relevant authorities.
- Effective approaches identify internal and external audiences, escalation thresholds, approval routes, alternative channels and decision points.
- This means that firms can provide clear and timely information in different scenarios, including if their usual channels are unavailable, so that they can continue communicating to support decisions and help reduce harm even during disruption.
Examples of poor practice
- Some firms provide limited evidence that communications would work if usual channels were unavailable, degraded or compromised.
- Some do not clearly explain how they would prioritise communications during prolonged disruption, nor adapt them for different audiences.
- Some self-assessments do not show how firms would use operational information, customer impact data and incident decisions to inform how they communicate during disruption.
We raised this theme in our last report. Our latest review showed that stronger firms have enough evidence to show that communications would work if normal channels, data flows or approval routes were unavailable.
Governance, assurance and accountability
Boards and senior management should have sufficient information to understand the firm’s operational resilience position, challenge assumptions, prioritise remediation and oversee ongoing resilience. Firms should consider whether their self-assessments clearly explain accountability for important business services, including where delivery depends on group services or shared infrastructure.
Examples of good practice
- More mature firms give Boards clear information on resilience capability, residual risk, vulnerabilities, remediation progress and investment choices, so they can challenge the firm’s current resilience position and prioritise action.
- If there are important business services that depend on group services, shared platforms or group arrangements, stronger firms clearly show that UK entities retain sufficient visibility and accountability, and that this helps with understanding the whole firm’s operational resilience.
- Effective governance arrangements show clear ownership for important business services, impact tolerances, mapping, testing, remediation and communication.
- Stronger self-assessments include second and third line input and show how firms track findings and challenge actions through to effective completion.
Examples of poor practice
- Some firms rely on Board approval of the self-assessment as the main evidence of oversight, without showing the nature of challenge, decision-making or prioritisation.
- Some firms do not provide enough evidence that UK Boards or senior managers have visibility over dependencies managed at group level.
- Some governance materials do not clearly distinguish current capability from planned improvements.
- Some self-assessments show limited evidence of independent assurance, second line challenge or third line review.
In March 2026, we highlighted observations relating to Board oversight, clear ownership, challenge, and second and third line involvement. These latest findings build on this – they focus on Board and senior manager visibility of current resilience, risk, and dependencies managed through group or shared arrangements.
3. Next steps for firms
Firms have made progress, but we will expect to see stronger evidence of their current resilience in their next self-assessments. They should demonstrate that they understand their residual risk, and how testing, incidents and second and third line input have informed decisions. We have shared feedback on individual firms’ approaches where needed and will continue to discuss operational resilience with them as part of our supervisory engagement.
Firms may look to distinguish between current capability and the improvements they expect from future remediation, investment or transformation. Until those improvements are delivered, Boards and senior managers should understand the firm’s current position, the assumptions behind it, and the residual risk rather than the anticipated position.
Firms may want to consider addressing any issues we previously identified that are still unresolved. In their next self-assessment, they can explain why any remaining issues persist and set out the action they will take. This may include improving mapping, more severe testing, testing communications, and strengthening Board challenge.
They may wish to use our operational resilience findings to inform business planning and risk management. Firms that understand how their important business services are delivered, test their ability to withstand severe disruption, manage dependencies and validate remediation will be more prepared for disruption. This will help them protect consumers, support market integrity and maintain confidence.
4. Glossary
| Term | Meaning |
|---|---|
| Operational resilience rules | The FCA operational resilience rules are contained in SYSC 15A of the FCA Handbook. Firms should refer to the Handbook for the full rules, guidance and defined terms. |
| Board/ governing body | We use Board as shorthand for the relevant governing body. Firms should apply this to the appropriate governing body for their structure. |
| Impact tolerance | The maximum tolerable level of disruption to an important business service, measured by time and any other relevant metrics. Firms should refer to SYSC 15A and the FCA Glossary for the full definition. |
| Important business service | A service that, if disrupted, could cause intolerable harm to clients or pose a risk to market integrity or financial stability. Firms should refer to SYSC 15A and the FCA Glossary for the full definition. |