Business Continuity Planning in the Banking Industry

The banking industry is considered to be one of the earliest adaptors of information technology. Over the years we have seen how the banking community has managed to fully embrace the benefits that they can reap from the different emerging technologies, and integrate it to their own business continuity plan or recovery plan. So, let's have a closer look at what business continuity plan is and impact on how banks are managed today.

What is a business continuity plan?

Business continuity plan (BCP) or recovery plan is considered to be one of the integral part of an organization response planning. This will basically dictates how an organization should operate during critical or disaster situations. Most of the time, BCP includes policies, standards and procedures, resumption and recovery of critical business processes and plans on how an organization can minimize other consequences and impact of disaster to its people, processes and infrastructure.

Why is it necessary for banks to have BCP?

Having a reliable recovery plan is very crucial for a banking institution as their services are very in demand during time of disaster. A typical bank normally runs at least 20 to 30 critical applications at the same time when organizations merged or get acquired. And in order to expand their operation and to be able to deliver real-time information banks would also tend to decentralize their systems. By having the right amount of preparation, banks will be able to avoid any disruption and maintain their services in a disaster situation.

Human Aspects of BCP

Although BCPs are usually focused on managing the technical aspects of a business, it still suggests that there should be a separate section that tackles the details regarding staff welfare, counselling, relocation consideration and other procedures that would ensure the security of each and every employee as they play a major role in any organization. BCP planners can also raise the aware of the employees by conducting staff training exercises or via company newsletters. In banks, they usually train at least one of the employees in handling critical jobs during times of crisis.

What are the key considerations while formulating a BCP?

• Ensuring real-time and accurate processing of securities transaction.
• Honoring of all customer payouts.
• Providing customers with real-time access to their assets and securities.
• Providing priority to deal payment.
• Compliance with regulatory reporting requirements.

BCP Testing
Testing is the final ingredient to a successful BCP. The results from coordinated tests can also serve as a very useful tool for BCP planners in assessing the readiness at all levels. For banks, it important that the complete test should cover all of the important phases of the recovery process including some of the areas that may have been overlooked by the BCP planner so that they may be able to properly document the procedures that they need to take during times of disaster.