Reflections on the themes emerging from TNF Athens 2023

Written by

Fraser Wikner

Published on

Insights
Of the varied and insightful material that surfaced at The Network Forum in Athens this year, we have examined some of the most pertinent themes relating to contingency planning, risk and operational resilience.

Contingency planning – network teams look to get on the front foot.

In the build-up to a major fight against Evander Holyfield, Mike Tyson famously told a reporter that “everyone has a plan until they get punched in the face.” After dealing with the shock of COVID, and then Russia’s invasion of Ukraine, that feeling is something most network managers can relate to.

MYRIAD Group Technologies Ltd attended the Network Forum (TNF) in Athens between June 20 – 22, where contingency planning was high on the agenda.

Network teams are living in a volatile world.

Having just navigated the pandemic, network managers are facing a new set of challenges.

The war in Ukraine has thrown up all sorts of logistical complications for custodians, according to speakers at TNF. For example, international sanctions imposed gainst Russia have forced sub-custodians with a presence in the country to either offload their operations or freeze Russian assets.

A number of agent banks in Russia are still caught in limbo by the sanctions to this day.

In the case of Ukraine, several sub-custodians told TNF that they have relocated their operations from Kyiv to cities in the west of the country, such as Lviv, which have so escaped the worst of the conflict, or to other CEE markets entirely.

What this conflict has highlighted is that network managers need to be attuned to geopolitical risk, as crises can escalate swiftly. Few would have anticipated, for instance, that the likelihood of civil war in Russia would be a very real (albeit brief) threat, barely 24 hours after TNF had wrapped up.

With Sino-US relations continuing to deteriorate and cyber-crime becoming an increasingly potent problem, network teams need to be prepared for all sorts of scenarios.

The ability to react quickly to such black swan events is therefore essential, if clients are to be protected. So, what do network managers need to do?

Getting the processes in place to react…

One of the legacies of COVID is that it forced network teams to rethink how they approach business continuity planning (BCP) and disaster recovery.

The unprecedented supply chain disruption caused by the pandemic has prompted many network managers to review their agent banks’ outsourcing arrangements in more detail than what they did before, by conducting thorough fourth party risk assessments.

Through robust risk monitoring and ongoing dialogue with vendors, custodians are mapping out all their agent banks’ outsourced providers (i.e., IT support, firms offering tax services or corporate action support, etc), to identify any weak links. This is enabling network managers to develop contingency plans for any disruption across their agent banks’ supply chains.

Those firms who adopted this approach to fourth party risk management ahead of the Ukraine war have fared better in ensuring business continuity for clients. One provider highlighted that their intricate knowledge and understanding of their agent banks’ underlying providers helped them manage the crisis more seamlessly.

Transparency is a must-have.

To support effective contingency planning, network managers need to have full visibility into what is happening across their agent banks. This is something which leading service providers – including MYRIAD Group Technologies Ltd – can help support.

MYRIAD is a Network Management and Vendor Governance platform. Conceived originally to address the specific requirements of network managers, the system has moved into the governance, risk and compliance (GRC) space. MYRIAD is designed to evolve with your business requirements and environment, continuing to be effective in times of change and reorganisation. MYRIAD houses all types of relationship data along with the ability to capture a vast array of risk data points and tracking of 3rd and 4th party dependencies, which can help network managers easily assess what and where their institution has exposures to, at the touch of a button.

Its functionality lets users merge multiple sources of information and documentation and provides a consolidated information repository available across your organisation.

By having tools available to them which support ongoing monitoring of agent banks and their suppliers, network managers will be in an excellent position to respond quickly to emergencies, and therefore protect clients. From a regulatory compliance perspective, it will also help firms adhere to the EU’s Digital Operational Resilience Act (DORA), which will introduce standardised rules for ICR risk management frameworks across EU member states, in turn strengthening operational resilience measures.

With volatility only expected to increase, these sorts of solutions will be critical for network managers, if they are to weather some of the challenges which lie ahead.