Skip to content

COVID-19: Maintaining operational resilience

Matt Eddy
Matt Eddy
Head of Real-Time Delivery & Integration at Refinitiv

Following the market shock of COVID-19, the financial services sector now needs to adapt quickly to the new environment. What operational resilience challenges do firms face in ‘the new normal’? And how can regulation and technology, such as business continuity planning, help them?

  1. COVID-19 is testing the operational resilience of all areas of society, including in business and technology. This has been illustrated in the more than doubling of messages per day observed on Refinitiv’s real-time messenger.
  2. New regulation from the Financial Conduct Authority (FCA) aims to strengthen operational resilience in the UK financial services sector, which could also help the operational resilience of firms.
  3. Companies can create business continuity planning and disaster recovery plans, and in doing so should be encouraged to employ the tools already at their disposal to bridge gaps in their environment.

For more data-driven insights in your Inbox, subscribe to the Refinitiv Perspectives weekly newsletter.

I’ve heard the phrase “the new normal” (and indeed have used it myself) several times over the past few months as we adapt to a new way of working across the globe.

It speaks to an attempt to normalize these extraordinary times that we’re living and working in. Certainly, a generation-defining event.

In terms of the impact this pandemic will have on our daily lives and society in general, I will leave to more well-informed voices. Instead, I will focus on the business and technology changes that are being forced upon us and to consider how we are reacting to them.

Refinitiv’s Enterprise Platform can help to reduce complexity and costs, and to streamline your operations

From my time working in investment banking technology teams, we never foresaw or tested for a total, global shutdown of trade floors, offices or operations centers. There was always going to be a skeleton staff there to keep the lights on, follow the sun, hand over the baton to the next shift in the office.

That is very clearly not the case now.

What will be the impact to your corporate network or internet firewalls as your entire staff connect in remotely, sometimes from far-flung locations that stress those infrastructures in unexpected ways?

Seismic market shocks

Purely from a markets context, there have already been some seismic activities.

Whether it is the CBOE shutting down its open outcry pits and moving all options trading to electronic trading only or whether it is the record message rates that Refinitiv is seeing on its real-time backbone over the past few weeks, these events have consequences in how you operate your environments.

Number of messages carried in each region daily on Refinitiv messenger
Source: Refinitiv

As the chart shows, our real-time message rates, typically seeing 80 billion messages a day on our core network, has leapt to double that volume, culminating in a peak of 176 billion messages on 28 February.

How many of our customers planned for that event? What threshold breaches were triggered and how did consuming applications handle those volumes?

How can regulatory drive help?

As late as last year, industry events that discussed the impending FCA policy regarding operational resilience. A brief excerpt from that website that summarizes the policy, which was in proposal stage until 3 April 2020:

Under the proposals, firms and FMIs (Financial Market Infrastructures) would be expected to:

  • Identify their important business services that if disrupted could cause harm to consumers or market integrity, threaten the viability of firms, or cause instability in the financial system.
  • Set impact tolerances for each important business service, which would quantify the maximum tolerable level of disruption.
  • Identify and document the people, processes, technology, facilities and information that support their important business services.
  • Take actions to be able to remain within their impact tolerances through a range of severe but plausible disruption scenarios.

Andrew Bailey, FCA Chief Executive, said: “It is in the public interest that a resilient financial system is able to supply the most important services with minimal interruption even during severe operational events. The proposed new requirements are aimed at achieving this outcome.”

Obviously, as this is from the FCA and PRS, this only currently applies to UK domiciled firms but the scale of the requirements — and the fact that they are asking for a named individual to be accountable for signing off that their firm is operationally resilient — makes this a big, serious deal.

Business continuity planning and disaster recovery

What does this mean in real terms for our customers? My experience has always been that business continuity planning (BCP) and disaster recovery (DR) environments have been a pared back poor relation to the production environment.

There are obvious cost implications to building out multiple production like environments and connectivity paths, and then ensuring that it is continuously running smoothly for if and when it is needed.

Is that change in usage patterns from your BCP event putting stresses on your production site that you had not predicted?

Building operational resilience

This is where your architects and engineers can earn their money. There are creative ways to build a resilient, production grade service offering using the tools at your disposal, rather than investing in redundant sets of feeds, servers and software.

When tackling those issues, I always used to rely on the Swiss Army knife of capabilities that the Enterprise Platform offered me. Some examples that spring to mind:

  • Disaster recovery site setup: Unable to drop circuits into your new DR facility in time for a planned event? Set up DR as a cascaded environment, blending the required content from two different production regions — or prioritize the lowest cost, lowest latency upstream service, knowing that you would seamlessly failover to the backup connection in the event of an emergency.
  • Market data connectivity: You’ve built out additional servers to deal with the liquidity spikes in some of your remote spoke sites but don’t want to spend the year’s budget on comms lines to deliver market data to them over your corporate network? Connect those applications directly to our ERT in the Cloud via the internet. It’s zero footprint with the same API, symbology and service as your traditional Elektron feeds. Try a free trial if you’re curious.
  • Efficiency vs TCO: Trying to control server and software costs during tests and dry runs? Set up your end user applications entitlements in DACS to allow those applications to seamlessly connect between environments. If this becomes permanent, quickly spin up a small standalone Enterprise Platform and DACS setup in a virtualized or containerized environment to control costs, but one that gives you the all-important segregation of environments.
  • Managing Bandwidth: If you’re pumping Full Tick traffic around your network for consumers that do not need it (throttling network, NIC and CPU capacity), either start consuming our Optimized feed or configure your Enterprise Platform to traffic manage to any update rate you desire.

Bridging the gap

Those examples above are just a few scenarios I’ve faced where using the tools at your disposal can quickly help bridge gaps in your environment. Gaps that traditionally would never have been exposed until the increased focus of pandemic planning and operational resilience raised the bar.

With ever-tightening regulations and policies and business continuity plans being stressed like never before, I’m sure a lot of our customers have already had these conversations and taken action.

However, if you haven’t, hopefully I’ve given you some ideas about how to approach this. Of course, if you would prefer that we do the heavy lifting for you, we are always open to setting up a meeting to whiteboard ideas — virtually of course!

Refinitiv’s Enterprise Platform can help to reduce complexity and costs, and to streamline your operations

Refinitiv is now on Telegram! Receive daily updates of critical and timely market analysis to your mobile. Subscribe to

Subscribe to the Refinitiv Perspectives Weekly Newsletter