OCiR At Natwest
The Operational Continuity in Resolution (OCiR) guidelines from the Bank of England (BoE) ensure that banks can continue to provide critical economic functions and services in the event of a resolution or financial stress. Compliance with OCiR is crucial for banks to maintain operational resilience and safeguard financial stability.
Client/Employer
Natwest Group GCC
Year
2016-2017
Category
Regulatory Compliance
Type of Work
UK Banking Regulations
Operational Risks
PRA Regulations
The Bank of England's (BoE) OCiR framework, outlined in PS21/16 and SS9/16, indeed gave firms until January 1, 2019, to meet compliance requirements. The 2.5-year transition period allowed banks to prepare for the significant operational, financial, and structural changes needed, including:
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Creating independent service companies to deliver critical shared services.
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Drafting or revising service level agreements (SLAs) to ensure operational continuity.
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Strengthening the financial resilience of service providers to withstand stress scenarios.
The structured timeline reflected the BoE’s pragmatic approach to balancing immediate regulatory expectations with the time needed for firms to implement sustainable changes.
NatWest Group's GCC in India operated through wholly owned service companies and was required to comply with the Bank of England's OCIR guidelines, similar to independent service providers.
The Founding Partner at Concinnity, serving as the head of Cost and Business Management Centers of Excellence (CoEs), was tasked with ensuring compliance with OCiR guidelines for the group's relationship with its Global Capability Center (GCC).
He swiftly assembled a specialized team to identify resolution-critical functions, services, teams, locations, and assets within the India GCC.
After cataloging all services and service assets and identifying resolution-critical candidates, the team conducted an in-depth analysis of the OCiR framework. This focused on understanding specific requirements related to:
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Governance
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Service continuity
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Financial resilience
The team then reworked and repurposed internal SLAs to align with the Bank of England’s standards for operational continuity, ensuring full compliance with the OCiR framework.
In addition to maintaining a clear mapping of critical functions and their underlying services, including third-party dependencies, the structural independence of the GCC companies was demonstrated through the following measures:
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Governance Mechanisms:
Establishing robust governance frameworks for inter-group services and implementing changes to SLAs to ensure compliance. -
Guidelines and Playbooks:
Developing detailed guidelines and playbooks outlining permissible service provider and recipient relationships across the Ringfence, particularly for interactions with NatWest Markets entities. -
Dedicated OCiR Lead:
Appointing a dedicated OCiR lead at the GCC to oversee compliance and ensure alignment with regulatory requirements. -
Quarterly Reviews and Reporting:
Conducting quarterly OCiR reviews with the Group COO and maintaining a structured regulatory reporting cadence. -
Scenario Testing and Continuity Exercises:
Performing periodic scenario testing and business continuity exercises to validate the resilience of critical services.
The OCIR requirements were designed to remain dynamic even after the 2019 compliance deadline.
Firms were mandated to regularly review and update their arrangements to account for operational changes and ensure continued alignment with regulatory standards.
The Bank of England (BoE) maintained oversight of compliance through its annual Resolvability Assessment Framework (RAF) reviews.
NatWest India GCC played a pivotal role in transparently compiling and sharing all essential information regarding resolution-critical services, assets, and contracts with the Bank. We also provided comprehensive inputs to support the Bank in computing and preparing for Funding in Resolution (FiR).
To ensure alignment and readiness, NatWest India GCC service companies established a structured cadence of reviews with the Group COO. This proactive approach ensured compliance and preparedness ahead of the PRA-mandated submission of Resolvability Assessments, effectively demonstrating the Bank's readiness for resolution.
