Skip to content

How is COVID-19 changing operational resilience in trading?

Stuart Bunyan
Stuart Bunyan
Director, Real-Time Architecture, Refinitiv

Today, operational resilience is in the process of becoming a compliance requirement. However, if implemented correctly, it will also create new opportunities for trading teams to improve their agility and deliver more value. Stuart Bunyan, Director, Real-Time Architecture at Refinitiv, explores how COVID-19 is changing thinking around operational resilience.

  1. Operational resilience is the ability of firms, financial market infrastructure organizations, and the financial sector as a whole, to prevent, adapt, respond to, recover, and learn from operational disruptions.
  2. The COVID-19 lockdown in March 2020 created unprecedented circumstances for trading teams, which tested their operational resilience.
  3. However, the lockdown also created opportunities for firms that were agile enough to engage with them.


The term ‘operational resilience’ has been used within the financial services industry for some time now, and the concept has been promoted by the Basel Committee on Banking Supervision, as well as U.S., EU and UK regulators. However, the COVID-19 pandemic has also challenged trading teams to embrace the concept as they worked to respond to the remarkable circumstances of 2020.

A new Refinitiv white paper, Why operational resilience is now essential for the trading business, explores ways in which trading teams at financial services firms consider operational resilience to be important for their business, as well as a potential future compliance requirement.

This blog, the first in a series of three, discusses how the concept of operational resilience is changing dramatically as a result of recent events.

Read the report: Why operational resilience is now essential for the trading business

What is operational resilience?

The Basel Committee on Banking Supervision defines operational resilience as: “The ability of a bank to deliver critical operations through disruption. This ability enables a bank to identify and protect itself from threats and potential failures, respond and adapt to, as well as recover and learn from disruptive events in order to minimize their impact on the delivery of critical operations through disruption.

“In considering its operational resilience, a bank should take into account its overall risk appetite, risk capacity and risk profile.”

Data feeds and delivery: Flexible data delivery options to meet your needs

The UK Financial Conduct Authority defines operational resilience more broadly, as: “The ability of firms, financial market infrastructure organizations, and the financial sector as a whole, to prevent, adapt, respond to, recover, and learn from operational disruptions.”

When the term ‘operational resilience’ began to be used about two or three years ago, it had strong associations with cyber risk. This was, in part, because the damaging cyber attacks and data breaches that many financial services firms experienced caused cybersecurity to rise to the top of the risk list for both firms and their regulators.

However, operational resilience was always about more than just being able to bounce back after a cyberattack. The COVID-19 pandemic emphasized to both firms and regulators just how important operational resilience is in unexpected circumstances. In particular, trading teams faced a perfect storm of operational resilience challenges as the pandemic crisis set in.

Why trading teams should embrace operational resilience

Why is operational resilience important for trading teams?

COVID-19 has transformed trading teams’ understanding of operational resilience.

To begin with, markets around the globe saw record trading volumes and volatility in the first few months of the COVID-19 crisis in the first quarter of 2020..

For example, on one Monday in early March, European stock trading volumes rose to more than three times their 90-day daily average, as equity prices suffered their largest one-day decline since the 2008 financial crisis, and oil prices dropped 25 percent.

In the midst of these extreme market movements, national lockdowns forced traders to work from home, from other offices, or from business continuity sites, creating significant disruption. Many firms had not planned for this kind of business continuity event, and so while no large scale failures happened, only 16 percent of firms felt their business continuity plans (BCPs) worked well during the crisis.

At the same time, trading teams were using record amounts of data and needed to be able to perform analytics quickly, while remaining compliant. How traders accessed their data changed, with a 20 percent increase in web access and a 50 percent rise in mobile usage access of Refinitiv data. The volume of data going over the Refinitiv feed was more than double the traffic in more normal times.

As a result of the need to adapt to these extraordinary circumstances, trading teams are now recognizing the importance of operational resilience.

While operational resilience may have regulatory requirements developing around it in the near future, it also just makes good business sense. Trading teams need to be able to carry on, no matter what, for both their firms and for their customers.

The failure to be able to trade customer orders in challenging market conditions could not only damage the firm’s reputation, but it could also harm its customers, other firms, and the financial system as a whole.

What is your trading team;'s data strategy?

How does operational resilience create opportunities?

COVID-19 has also demonstrated that operational resilience isn’t just a defensive concept. The circumstances created by the pandemic presented firms with opportunities, too.

For example, the international capital markets had their strongest ever six-month period in the first half of 2020, raising US$5.5tr globally. This was a 35 percent year-on-year increase, and the highest figure since records began in 1980. Also, the number of offerings exceeded 130,000 for the first time ever. Records were also broken for U.S. investment-grade issuance and for global high-yield issuance, as well.

Other doors opened, too. For example, investment management experienced a shift in preference from passive to active strategies,  while exchanges and trading teams saw profits soar thanks to high trading volumes and volatility. However, in order to take advantage of all of these opportunities, trading teams needed to be very agile.

Financial services firms and their trading teams had to be able to adapt quickly to the challenging circumstances. They had to be able to access their market data, engage with analytics to help them better understand what was happening around them, and trade in a compliant way.

Teams with operational resilience — who were agile enough to do all of these things as the COVID-19 situation unfolded — were better positioned to trade successfully on behalf of their firm and their clients.

So, while operational resilience may soon be a regulatory requirement for some firms, it’s clear that a robust approach can also drive substantial business value for trading teams.

It’s impossible to predict what the next crisis will be, or even how the current COVID-19 pandemic will continue to unfold. However, trading teams can be prepared — and even thrive — if they embrace operational resilience.

Data feeds and delivery


Subscribe to the Refinitiv Perspectives Weekly Newsletter