Resilience and Recovery: BCP and DR Essentials
The importance of disaster preparation cannot be overstated for financial institutions. These institutions must be ready for the unexpected, whether it’s a natural disaster, pandemic, or cyber-attack. If your financial institution’s systems went down, how quickly could you restore operations? Ensuring swift and efficient recovery depends on having solid Business Continuity Plans (BCP) and Disaster Recovery (DR) plans.
BCP and DR are both critical components of the overall Business Continuity Management (BCM) process, which also includes resilience, emergency response, crisis management, and third-party integration. The Federal Financial Institutions Examination Council (FFIEC) guidelines emphasize the need for institutions to adopt an enterprise-wide, process-oriented approach to business continuity. This strategy aims to ensure that financial institutions are not just prepared to recover but are also resilient enough to withstand disruptions.
Key Differences Between BCP and DR
You might wonder why both a Business Continuity Plan and a Disaster Recovery Plan are necessary. While they are closely related and designed to work in tandem, they serve different purposes. A BCP outlines the strategies and protocols that enable a financial institution to continue operations during and immediately following a disaster. In contrast, a DR plan focuses on restoring critical data and applications so the institution can operate normally.
BCP:
- A plan to continue business operations.
- Consists of a business impact analysis, risk assessment, and an overall business continuity strategy.
- Includes pandemic planning as part of its overall strategy.
DR:
- A plan for accessing required technology and infrastructure after a disaster.
- Involves evaluating backups and ensuring necessary redundant equipment is up-to-date and functional.
Both plans require regular testing and maintenance to ensure they are effective. The BCP test, often a tabletop exercise, ensures employees know their roles during a disaster. The DR test is more hands-on, confirming that backup technologies can restore operations within the Recovery Time Objective (RTO).
7 Tips to Prepare for Disasters or Business Interruptions
Existing BCP and DR plans are crucial, but beyond that, several additional steps can further prepare your institution for various disruptions. Below are 7 best practices. Read the full white paper, BCP and DR Plans: What Every Financial Institution Needs to Know, for more.
- Monitor the success of backups and replication services.
- Utilize Uninterruptible Power Supplies (UPS) for short-term outages.
- Safeguard critical equipment by preemptively shutting it down if an extended outage is anticipated.
- Secure the server room and ensure all equipment is protected.
- Ensure ATMs are for customers that need access to cash.
- Verify key employees have someone to step in if they are unavailable.
- Validate and test the BCP and DR plans at least annually to ensure they are up-to-date and effective.
Choosing to Manage BCM In-house or with an IT Partner
Preparing for or recovering from a disaster can be challenging for some community financial institutions that often lack IT resources. When choosing an in-house disaster recovery solution, they face technical and time-consuming processes, which can strain limited IT staff. When outsourcing, institutions can choose a local provider for convenience, but these providers may have little financial services expertise posing its own set of difficulties. When in-house resources or local expertise are limited, another alternative is partnering with a national managed services provider that specializes in the banking industry. This offers several benefits, including streamlined processes, improved disaster preparedness, and dedicated DR support.
However an institution chooses to manage DR and BCP, it is essential to develop, implement, and regularly test disaster recovery and business continuity plans. Though daunting, using automation and outsourcing services can ease the maintenance burden and ensure compliance with evolving regulations.
To learn more about resilience and recovery, read our white paper, BCP and DR Plans: What Every Financial Institution Needs to Know.
If you’re unsure whether your institution is BCM ready, consider a complimentary plan review to ensure your BCP and DR plans are up to date and fully compliant,