Title Page
INTERNATIONAL MONETARY FUND
Operational Resilience in Digital Payments Experiences and Issues
Tanai Khiaonarong, Harry Leinonen, and Ryan Rizaldy
WP/21/288
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
2021
DEC
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© 2021 International Monetary Fund
WP/21/288
IMF Working Paper
Monetary and Capital Markets Department
Operational Resilience in Digital Payments: Experiences and Issues Prepared by Tanai Khiaonarong, Harry Leinonen, and Ryan Rizaldy*
Authorized for distribution by Tommaso Mancini-Griffoli
December 2021
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
ABSTRACT: Major operational incidents in payment systems suggest the need to improve their resiliency. Meanwhile, as payment infrastructures become more digitalized, integrated, and interdependent, they require an even higher degree of resilience. Moreover, risks that could trigger major disruptions have become more acute given the rise in power outages, cyber incidents, and natural disasters. International experiences suggest the need to strengthen reliability objectives, redundancies, assessment of critical service providers, endpoint security, and alternative arrangements.
| JEL Classification Numbers: | E42 E58 E59 M15 |
| Keywords: | Operational resilience, payment systems, risks, disasters, business continuity |
| Author’s E-Mail Address: | tkhiaonarong@imf.org; harry.leinonen@gmail.com; rrizaldy@imf.org |
| JEL Classification Numbers: | E42 E58 E59 M15 |
| Keywords: | Operational resilience, payment systems, risks, disasters, business continuity |
| Author’s E-Mail Address: | tkhiaonarong@imf.org; harry.leinonen@gmail.com; rrizaldy@imf.org |
Title Page
WORKING PAPERS
Operational Resilience in Digital Payments
Experiences and Issues
Prepared by Tanai Khiaonarong, Harry Leinonen, and Ryan Rizaldy
Contents
I. INTRODUCTION
II. OPERATIONAL RESILIENCE
A. Definition
B. Wide-Scale or Major Disruption Scenarios
C. International Principles and Assessments
III. INTERNATIONAL EXPERIENCES
A. Reliability Objectives
B. Redundancies
C. Critical Service Providers
D. Endpoint Security
E. Alternative Arrangements
IV. DEVELOPMENT AND OPERATIONAL ISSUES FOR THE FUTURE
A. Impact Tolerance
B. Business Continuity Arrangements
C. Tandem Processing
D. Interoperability
E. Cost and Implementation
V. CONCLUSION AND FUTURE RESEARCH
REFERENCES
FIGURES
1. Risk Scenarios—Scale of Disruption and Outage Time
2. Major Power Outages, 1999–2019
3. Cyber Incidents Involving Financial Institutions, 2007–2020
4. Mapping of Interdependencies for Payment and Market Infrastructures
5. Synchronized Tandem Payment Processing Design
TABLES
1. Outage of Systemically Important Payment Systems in Selected Jurisdictions
APPENDIXES
1. Key Challenges for Improving Operational Resilience in Payment Systems
2. Principles Relevant for Assessing Operational Resilience in Payments
3. Selected Operational Incidents in Payment and Settlement Services
4. Role of Cash in Contingency Planning
The authors would like to thank Rachel van Elkan, Julia Faltermeier, Diep Ferris, Emran Islam, Arif Ismail, Andy Jobst, Majid Malaika, Marcello Miccoli, Jan Nolte, and Sali Osman for their inputs and comments. Erica Sandoval provided editorial assistance.
