Business Continuity Management is a domain of growing importance for FinTechs, empowering them to overcome barriers, build resilience and advance risk operations, writes Muhammad Kashif, Associate Director at ECOVIS Al Sabti.
Financial technology (‘FinTech’) has rapidly transformed the financial services industry in the recent years. FinTech has redefined traditional business models by leveraging advanced technology, data analytics, and accessible solutions for everyday users. This transformation has accelerated growth across multiple sectors, including retail banking, education, fundraising, and investment management.
With FinTechs growing their reliance on technology, the need for resilient business practices, such as Business Continuity Management (BCM), has become critical.
SAMA’s expectation from FinTechs
In Saudi Arabia, regulators like the Saudi Central Bank (SAMA) have emphasized the need for strong BCM frameworks, particularly for FinTech license holders. SAMA’s emphasis on BCM compliance highlights the necessity for FinTech firms to develop resilient strategies that align with the regulatory standards, thus enhancing customer trust, and supporting sustained growth within the financial landscape of the Kingdom.
The BCM framework set by SAMA is notably stringent, encompassing thirteen (13) key areas with seventy-five (75) high-level controls. These elements are structured to ensure that FinTech companies are well-prepared to manage and swiftly recover from potential disruptions, thereby safeguarding their own operations and contributing to the stability of Saudi Arabia’s broader financial ecosystem.
How BCM helps FinTech companies
Business Continuity Management is an essential framework for FinTech companies, helping them mitigate risks and ensure operational stability in a rapidly changing and complex regulatory environment. It equips these organizations with protocols needed to anticipate disruptions and maintain service delivery, thereby strengthening their competitiveness in the market.
Enhanced Risk Management
- Operating in a dynamic, highly regulated environment, FinTech companies face myriad risks, from cybersecurity threats to regulatory changes.
- BCM helps identify and assess these risks, facilitating the creation of robust mitigation strategies that safeguard operations and ensure preparedness for potential incidents.
- By employing BCM, companies can manage continuity risks effectively by identifying the time-critical services and processes. This can proactively plan alternative arrangements and adapt swiftly to evolving challenges.
Building Operational Resilience
- FinTech organizations heavily depend on technology and data systems to deliver their services.
- BCM ensures that these critical functions are resilient and capable of rapid recovery during disruptions, reducing downtime and sustaining uninterrupted service; an essential requirement for maintaining customer trust and operational stability.
Ensuring Regulatory Compliance
- SAMA mandates that financial institutions, including FinTech firms, have sound BCM frameworks to uphold service continuity during crises.
- Compliance with these standards not only helps companies avoid penalties but also strengthens their credibility with clients and partners, einforcing a commitment to security and continuity.
Strengthening Customer Trust and Reputation
- FinTech companies that prioritize BCM demonstrate their commitment to protect stakeholders’ interests, ensuring seamless service, even in turbulent times.
- This dedication fosters customer loyalty and boosts the organization’s reputation as a trustworthy partner.
Cost-Effective Solutions for Incident Management
- An effective preplanned and well-thought BCM strategy helps organizations minimize financial loss, operational downtime, and reputation damage that can be caused by unmanaged disruptions.
- By proactively identifying and addressing risks, FinTech firms can avoid the costly impacts of potential incidents, thereby contributing to long-term financial stability.
Competitive Advantage through Resilience
- Organizations that can quickly recover from disruptions have a clear competitive advantage in Saudi Arabia’s business landscape.
- By investing in BCM, FinTech companies not only enhance operational resilience but also demonstrate a commitment to excellence, setting them apart in a fast-paced, interconnected market.
ECOVIS Al Sabti is an award-winning consulting firm with offices in Riyadh, Jeddah, Khobar, and Manama. The firm is a member of ECOVIS, a global consulting firm rooted in Continental Europe.
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