Risk management practices for Islamic Financial Institutions during an unprecedented crisis: Bank Negara Malaysia's approach to operational resilience

Abstract

This paper aims to evaluate the risk management policies issued by Bank Negara Malaysia on its approach to operational resilience under the unprecedented crisis of COVID-19.  The research design will be a document analysis. A study on the relevant policies issued by Bank Negara Malaysia in response to its approach to operational resilience. Findings revealed that the issue of operational resilience was given greater attention arising from the COVID-19 pandemic in 2020. BNM has strengthened its business continuity and crisis management requirements for the Financial Institutions to adhere to through issuing a Policy Document on Business Continuity Management and its relevance, including several communications to the FIs. Meanwhile, regulators from other countries have taken similar operational resilience approaches by enhancing their documents accordingly. The study sample will be confined to the policy documents issued by Bank Negara Malaysia only, not other regulators. The results from this research will contribute to feedback to the regulators to formulate guiding documents about operational resiliency. The findings will enrich the literature on risk management practices concerning operational resilience towards unprecedented crises for researchers and risk and compliance professionals