The regulatory environment in financial services has never been more robust as it relates to business continuity management practices. The Securities and Exchange Commission, The National Association of Securities Dealers, International Standards Organization, and Sarbanes Oxley all have specific implications to how you address business continuity management.
The new regulations have set a higher standard for operational resiliency at your organization and mandate that your senior management be involved strategically and tactically in the event of disruptions.
Your business partners have been asking you about your state of readiness. Your service level agreements with customers contractually obligate you to address it. You should have comfort that when you say to your customers “we’ll be there for you” that you can deliver on that promise to them.
- Increased regulatory attention from the SEC, NASD, ISO and compliance legislation
- “Backup to backup” testing (i.e., testing from recovered environments to business partners’ recovered environments)
- Shared recovery solutions/reciprocal agreements
- Geographic dispersion of intellectual capital
- Implementation of alternative solutions for communications and connectivity
- Leveraging BCP budgets to address multiple business and technical needs (e.g., data backup/records management, system redundancy/performance management)
- Focus on pre-event risk minimization and post-event response strategies
- Organizational commitment to BCP and a well-defined risk management function
- Pre-established relationships with federal, state, and local emergency management personnel
- Clearly defined incident/emergency management response strategies
- Use of a scenario-based planning approach
- Alternate locations located at a safe distance
- Well established procedures for the electronic storage of vital records
- A robust technical recovery strategy; no single points of failure
- Frequent and extensive testing of their BCP plans that include business partners
- A strong maintenance process to keep their plans current
- Contracting for business interruption insurance
- Has the Audit Committee/Board of Directors voiced concerns about the your “state of readiness”?
- Do regulatory requirements mandate business continuation?
- Do you have a history of business outages/disruptions or have they recently suffered a publicized disruption?
- Do you rely on business partners and other third parties in delivering products and services to market?
- Are your IT resources inexperienced/insufficient?
- Are you in the process of implementing new systems?
- Are you looking for ways to competitively differentiate yourself?
- Do you have a formal internal business continuity planning framework?
- Have there been recent changes to the organizational structure (mergers and acquisitions, divestitures, spin-offs)?
For additional information on Risk Solutions International’s capabilities within the Financial Services & Insurance sectors, please contact Neil H. Kaufman at NKaufman@rsi-llc.com.
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