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Navigating the perfect storm: how observability resolves shifting regulatory expectations
Organisations today face a perfect storm — rapid technological change and mounting regulatory pressures. To stay ahead, they must move beyond isolated efforts and adopt a more integrated approach to resilience.
This article explores the synergies gained by uniting business, risk and technology efforts to achieve true operational resilience. We’ll also examine the shift in regulatory expectation from traditional business continuity management (BCM) to an integrated end-to-end approach, with client and market impacts a primary focus. Finally, we’ll highlight how observability — by providing deep insights into system behavior and performance — strengthens resilience, ensuring reliability and peace of mind.
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The shifting expectations of regulators and how observability can help
Regulators and international standards now expect organisations to shift from traditional business continuity management and recovery-led approaches to a comprehensive operational resilience approach that allows for continuing to operate and manage through a disruption. This new approach should focus on minimising client and market impacts. Accountable executives and risk management teams need to be empowered with real-time monitoring and operational data. These requirements apply not only to financial services and critical infrastructure but also to their service providers, due to regulations like CPS 230 and SOCI.
The ecosystem requires uplifted, more efficient and transparent trust.
Role of observability in transformation governance
Observability, once a tech-specific tool, has become a critical enabler of governance, giving a single-pane-of-glass view that connects complex systems and provides deep visibility into customer interactions, service dependencies and performance issues. It supports SLA compliance, strengthens control mechanisms and enhances customer experiences.
In transformative initiatives, as an example, observability can act as a monitor over changes across development, testing and production, ensuring delivery teams meet their objectives and responsibilities. This transparency boosts accountability and reduces risks like unauthorised changes or security breaches. The observability tool set can be owned by a team separate from the program - providing real-time, enhanced program assurance. By using observability, organisations can adopt a "shift-left" strategy, embedding governance throughout transformation, delivering with trust and confidence.
Role of observability in operational resilience and meeting regulatory obligations
Regulators are now emphasising integrated operational resilience and accountability at the board and executive levels. Observability can be a key component in meeting regulatory obligations by providing deep insights into system behavior.
Current monitoring is confined to within a silo/department/system. The move to cloud has reshaped operating models and accountability, without necessarily the requisite re-alignment of risk management accountabilities. Decades of enterprise architecture, influenced by “Conway’s Law” have shaped tech ecosystems — often reinforcing organisational silos and accumulating technical debt.
PwC's "Steel Thread" approach shows how to map from an aggregated view of resilience risk and end to end processes through complex technology stacks, ensuring transparency across the full spectrum and depth of the system. Augmented with open telemetry, an open-source observability framework,it can further extend observability to traditionally opaque and hard-to-configure processes, helping to meet regulatory needs and uplift overall business and customer outcomes.
Beyond the systems and processes, the data that is generated, processed, and supports the adoption of AI must be grounded in trust, which hinges on transparency and explainability. Data observability becomes the cornerstone of this trust by providing explainability and demonstrable evidence.
Observability goes beyond compliance and risk management, acting as an enabler of the governance framework and technical assurance layer. It enhances accountability for stakeholders, validates end-to-end business processes, and positions organisations for long-term stability, agility and success.
If you would like to find out more, please contact Matt Cudworth, Noel Williams and Arya Choudhury
Matt Cudworth
Lead Partner, Digital Engineering, PwC Australia
Noel Williams
Partner, FS Emerging Technologies Leader, PwC Australia
Arya Choudhury
Director, Advisory, Digital Engineering, PwC Australia
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