Business continuity plan for banks
2004, the securities and exchange commission approved nasd rules 3510 and 3520 and nyse rule 446, which require member firms to create and maintain business continuity plans. In accordance with these rules, a business continuity plan will enable the firm to continue its business in the event of a significant business disruption or, in the alternative, conduct an orderly wind-down of this page, clients of deutsche bank’s u. Broker-dealers (deutsche bank) will find information on deutsche bank’s commitment to these obligations and highlights of our business continuity he bank business continuity ive business continuity measures are critical for any business entity. Deutsche bank is committed to protecting its staff and ensuring the continuity of critical businesses and functions in order to protect the deutsche bank franchise, mitigate risk, safeguard revenues and sustain both a stable financial market and customer confidence. The development, implementation, testing and maintenance of an effective global business continuity and disaster recovery program are required to sustain these further our commitment in the event of a significant business disruption, as well as meet all regulatory requirements, deutsche bank’s infrastructure includes a business continuity management (“bcm”) group that is an integral part of deutsche bank's normal business operations. Bcm plans, tests, and manages crises concerning business lines and functions’ relocation and critical plans to ensure business continuity address the ten key areas finra and nyse stated must be addressed:Data back-up and recovery (hard copy and electronic) – identification of the location of primary books and records (hard copy and electronic) and the location of back-up books and records (hard copy and electronic). In addition, firms must be prepared to describe how they back up data, as well as how they will recover data in the event of a significant business mission critical systems – systems that are necessary, depending on the nature of a member's business, to ensure prompt and accurate processing of securities transactions, including, but not limited to, order taking, order entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts and the delivery of funds and ial and operational assessments – written procedures that allow a firm to identify changes in its operational, financial, and credit risk exposures.
Bank business continuity plan
Vendor management programs should include provisions for the disruption and restoration of service at service providers, including the consideration of service provider test financial institutions and service providers with complex retail payment operations, business continuity plans should enable restoration of service within timeframes that are reasonable for internal business units, other dependent financial institutions, and counterparties. Financial institutions providing significant card issuing, merchant processing, eft/pos, ach, and retail payment-related internet banking services should also test these plans periodically with customer financial institutions and counterparties to ensure plans are us sectioninformation securitynext sectionvendor and third-party l reserve ity banking connections. Business resumption planning for ss resumption planning for banksby aaron cohen, technology architect, federal reserve bank of chicago, and anthony toins, examiner, federal reserve bank of ss resumption planning is a comprehensive bankwide process that defines how a bank is to respond to and recover from business disruptions, enabling a bank to continue to support constituents and stakeholders alike. The plans incorporate business processes, people, and community banks rely heavily on third-party service providers to deliver core banking solutions that, when key services fail, create a single point of failure for these banks. In 2012, when superstorm sandy disrupted payment processing and thereby affected liquidity levels, many community bankers realized the importance of having cost-effective solutions to manage single-point-of-failure ss resumption planning is not only about third-party risk but should also address everything from pandemics, like the 1918 flu pandemic,1 to terrorist attacks, such as the september 11th attacks, to natural disasters, to nation- or state-sponsored cyberattacks2 against financial sector institutions. The planning process should address the range of disruptions or failures that could occur and include mitigants for each type of disruption or article discusses business resumption in the context of business continuity and disaster recovery planning. The goals are to provide banks with concepts and ideas to consider when developing or strengthening their business continuity planning processes as well as to encourage a dialogue between institutions and examiners about business resumption planning based on a shared ss continuity planning business continuity planning process includes developing strategies for the resumption of critical business processes and the technical recovery of critical information systems supporting those functions.
A bank should approach business continuity planning as a bankwide responsibility that should prioritize business objectives. Business continuity planning should consider how essential processes, business units, departments, and information systems will contribute to a coordinated response to a bankwide disruption. A tight integration of the institution’s overall planning process with that of the individual business units’ plans for resumption of essential processes is critical for business resumption and recovery. Bank senior management should set the tone at the top that business continuity is everyone’s responsibility and not just an information technology (it) issue handled by the it should consider adopting an iterative approach to business continuity planning. The four steps for an effective program are (1) business impact analysis, (2) risk assessment, (3) risk management, and (4) monitoring and testing. Additionally, when key bank functions are outsourced, third-party risk should be considered during the planning process. The business continuity planning process should evolve continuously in response to changes in potential threats and business operations and to address audit recommendations and test ss impact first step in the business continuity planning process is the business impact analysis, which identifies mission-critical business functions and quantifies the impact a loss of those functions (for example, operational and financial) may have on the organization.
It also should determine how quickly essential business units and/or processes can return to full operation following a disruption, as well as identify the resouces required to resume operations. It is important that the analysis include a bankwide view, with contributions from senior management representatives from all lines of business, not just the it function. And, finally, the business impact analysis should be approved by both the bank’s senior management and board of directors and should be updated at least annually or when there are significant changes at the bank to either business processes or the it infrastructure. Of the potential impact of business disruptions resulting from uncontrolled, unknown events on the bank’s business functions and processes;. Estimate of maximum allowable downtime; estimate of recovery time objectives,7 recovery point objectives,8 and critical path recovery (banks should document how recovery times/objectives are determined and whether they are validated by testing). While a risk assessment determines what could cause an outage, a business impact analysis attempts to measure the effects should an outage occur. Senior management should use this information to identify where risks exceed risk appetite and develop a program to reduce the likelihood and impact of risk assessment should include:An evaluation of business impact analysis assumptions using various disruption scenarios;.
Of potential business disruptions based on severity;9 analysis of the gap between existing business continuity planning and the policies and procedures that should be implemented.. Bank’s senior management should be responsible for maintaining a current risk assessment based on changes to the bank’s it environment, audit findings, and business continuity/disaster recovery planning test de risk management is the third step in the development and maintenance of a sound business continuity planning process. Risk management in this context should be able to measure and reduce risks to an acceptable level through a well-developed business continuity planning process. While the development and maintenance of the business continuity plan may be outsourced, the ultimate responsibility for risk management resides with the bank’s board and senior management. The business impact analysis and risk assessment should be an integral part of the formally documented business continuity plan. The impact analysis and risk assessment should provide the bank with sufficient information to monitor its business continuity plan and to determine when material and significant changes in internal and external conditions have occurred that necessitate revisions to the plan. The business continuity plan should focus on threats that have a relatively high likelihood of disrupting operations and should describe the various types of realistic events that could prompt the formal declaration of a disaster and the process for invoking the business continuity plan.
Also, the business continuity plan should be updated by each business unit, reviewed and approved by the board and senior management at least annually, and communicated to employees for timely ring and testing the ring and testing make up the final step and validate that the business continuity planning process remains viable and does not overlook significant changes that may require revisions to the plan. Therefore, senior bank management should commit sufficient budget, staff, and time to a robust bankwide testing program to validate that the business resumption plans would actually work in the event of a disruption. Bank testing programs should define roles and responsibilities; outline test strategies and test plans; analyze and report testing results, including lessons learned; and lead to the development of action plans to address weaknesses identified through the ss continuity planning for outsourced technology services are increasingly outsourcing critical operations to third-party service providers. There are four key areas of business continuity planning that banks should address with respect to the resilience of technology services:-party management addresses the bank’s responsibility to control the business continuity risks associated with its technology service providers and their -party capacity addresses the potential impact of a significant disruption of a third-party servicer’s ability to restore services to multiple g with third-party technology service providers addresses the importance of validating business continuity plans with technology service providers and provides considerations for a robust third-party testing resilience addresses aspects of business continuity planning unique to disruptions caused by cyber strategies and building out an effective business continuity planning program and incorporating third-party risk, a bank should test its plans at least annually. However, there may be situations that require a bank to test the plans more frequently. For instance, if a bank undergoes a merger or acquisition or if there have been material changes to business processes or the it infrastructure, the bank should consider retesting the business resumption plans to reflect the new are four testing approaches15 (listed in order of least to most rigorous):Full-interruption inary exercises. In these preliminary tests, representatives from each of the bank’s functional areas meet and review the business resumption plans.
In a tabletop exercise, the bank’s business line representatives review and evaluate the plans in context of objectives, scope, assumptions, and organizational structure, as well as review testing, maintenance, and training requirements. The representatives talk through the steps that would be performed as part of the restoration and recovery of the bank’s business operations. The challenge with these two methods is that they give minimal insight into how the bank would actually respond in the event of a real disruption because none of the business resumption plan components are actually engaged and evaluated for real-world -world testing. Functional drills and full-interruption tests involve implementing and executing the bank’s business resumption plans in a setting that closely mimics real-world disruptive events. A functional drill is a full test of the bank’s plans and generally includes running the bank’s business operations from an alternate site and the primary site concurrently and comparing the results. The end goal is to determine if the alternate site can support the bank’s business operations. The full-interruption method should be thoroughly planned before executing to ensure that business operations will not be negatively bank management should ensure that the appropriate staff is assigned to participate in testing.
The selected testing method should reflect the bank’s experience with business resumption for its current environment in the context of size, complexity, and nature of its business. Some banks have addressed the inherent tradeoffs in testing methods by performing an annual functional drill test and benchmarking their results against formally defined recovery time and point ss resumption testing should document the following when performing any test:Business processes tested. Summary comparing testing objectives with actual testing fication of material deviations from test plans, including whether or not intended participation levels were identified during testing, including remediation tion by a qualified independent party not involved in the testing results to have meaning, senior bank management should review the results and provide a report on its assessment of the results to the board, audit function, functional business units, and the it function. The reporting that is presented to the board should provide enough information to allow the board to determine if the business resumption plans meet the objectives embodied in the business impact there are material changes to the environment either from a business process or technology perspective, bank examiners expect that the business resumption plans will be updated to reflect the new environment and tested to determine that the plans are still valid. Examples include regulatory changes (such as data retention requirements), mergers and acquisitions activity, changes in vendor relationships, and changes to the it l business continuity and disaster recovery planning deficiencies noted by l deficiencies noted during examinations have included the following:Business continuity/disaster recovery test plans and/or testing not completed or updated in a timely ss impact analyses that do fy critical business fy supporting systems, maximum allowable downtime, recovery time objectives, or recovery point uate staff e to demonstrate recovery e to test alternate site relocation, including connectivity e to test all critical systems at least uate or infrequent annual reporting of test results to the bank’s board of directors, including the failure to provide timely information l program g and training results against recovery time and point ss resumption concerns have the potential to go to the very heart of a community bank’s ability to serve its key stakeholders, including customers, vendors, and business partners, as well as its ability to maintain appropriate liquidity levels. Therefore, when a bank’s senior management reviews its business resumption program, bank management should make sure that there is a well-defined and comprehensive process incorporating appropriate real-world scenarios and corresponding response plans based on those scenarios. The process should transcend business resumption planning for just the it function and embrace all lines of the bank’s business.
See supervision and regulation letter 07-18, “ffiec guidance on pandemic planning,” available at /boarddocs/srletters/2007/. Bank senior management should not view business continuity and disaster recovery as one and the same. Disaster recovery is a subset of business continuity planning that focuses on bringing information systems back online. While a business resumption examination is traditionally performed by information technology (it) examiners, business resumption planning should extend beyond the bank’s it area and include all bank functions and departments. See the discussion of the business continuity planning process (page 3) in the ffiec business continuity planning it examination handbook, available at http:///stgbe. See the discussion of the business impact analysis (page 6) in the ffiec business continuity planning it examination handbook, available at http:///stgbe. Note that some aspects of development and maintenance could be outsourced, such as it and documentation generation and updating; however, the bank is better positioned to address other aspects, such as succession planning and the identification of critical personnel.
See appendix j, “strengthening the resilience of outsourced technology services,” in the ffiec business continuity planning it examination handbook, available at http:///suk9o. See the discussion of action summary items in the ffiec business continuity planning it examination handbook, available at http:///stgbe. These test methods are also commonly referred to as “structured walk-through test,” “simulation test,” “parallel test,” and “full-scale test,” concentrations present deep tradeoffs for community banks and bank pment and maintenance of an effective loan policy: part es issue final rule for new flood insurance ad the complete our reader federal reserve system provides various resources for training, services, and more. All rights ionalize your te and collaborate with your t the right people to the right ncy management ss continuity planning for financial ate crisis management ss continuity planning for financial vicki thomas - independent contributor | june 24, 2015 |. Events in the united states and abroad have reaffirmed how vital it is for every type of business and institution to have a business continuity plan. When banks and financial institutions fail to operate, businesses fail, jobs are lost, homes are lost, and communities fail to business continuity planning? Financial institution is a business - there are clients, third-party vendors, contractors, employees, and other parties who are all concerned with the ongoing continuity of service.
For example hurricanes, snow storms, or -driven threats such as theft, cyber-attacks (including digital viruses), or cal infrastructure failure such as software or hardware failure, database loss, or online banking scenario requires a different response plan, including a different crisis communication plan. In the event of a hurricane or fire, you will need to be prepared to have an alternate location for business. With a cyber-attack, your information technology response must be prepared and your crisis communication plan with clients and media must be proven. Knowing how and where your data is backed-up is crucial in the event of a technological infrastructure communications team and plan for any financial institution must be prepared for any and all types of incidents. The financial institutions’s other banking partners need to know that the institution is stable and will resume continuity of service. The employees need to know that they are working in a safe environment and that there is business continuity plan in to the sensitive nature of financial institutions, it is very likely that you’ll need to closely monitor all external communications during an incident. This means knowing what messaging will be used on social media, how emails to customers will be handled, what will be said during press conferences, what will be communicated with your corporate customers and finally, what will be communicated to all financial institutions are partnering and working together to ensure that continuity of service occurs during a threat or disaster.