[OR] [ESB] [E1] [C5] Identifying Critical Business Services

eBook 1: Chapter 5

Critical Business Services of Equicom Savings Bank for Operational Resilience

Introduction

For Equicom Savings Bank, identifying Critical Business Services (CBS) is one of the most important starting points in implementing an operational resilience programme.

A CBS is a business service provided to customers or stakeholders that, if disrupted, could cause intolerable harm to clients or threaten the soundness, stability, or orderly operation of the financial system.

BCM Institute also notes that CBS may be used synonymously with “Critical Operations” or “Important Business Services” depending on regulatory terminology.

Under BSP Circular No. 1203, Philippine banks and BSP-supervised financial institutions are expected to identify their critical operations, set tolerance for disruption, map interconnections and interdependencies, and test their ability to continue delivering these operations under severe but plausible scenarios.

The BSP specifically requires the identification process to cover the end-to-end activities needed to deliver critical operations, rather than focusing only on individual people, processes, or systems.

Equicom Savings Bank’s Likely Critical Business Services

Based on Equicom Savings Bank’s publicly listed products and services, its main service areas include deposits, loans, cards, online banking, phone banking, bill payment, and branch and ATM services.

The Equicom Group also lists Equicom Savings Bank services, including savings, checking, and time deposits; consumer and business/corporate loans; credit/debit/prepaid cards; cash management facilities; internet and mobile banking; and fund management.

The following CBS should be considered when implementing operational resilience:

CBS Code	Critical Business Service	Why It Is Critical	Example of Disruption Impact
CBS-1	Deposit and Account Services	Enables customers to open, maintain, access, and manage savings, checking, and time deposit accounts.	Customers cannot access funds, update account information, or complete account servicing requests.
CBS-2	Payments and Funds Transfer Services	Supports bill payment, fund transfers, clearing, and customer payment obligations.	Delayed or failed transfers, unpaid bills, customer complaints, and possible regulatory concerns.
CBS-3	Digital Banking and Online/Phone Banking	Provides 24/7 customer access to account balances, transactions, and banking services.	Customers lose digital access, causing service disruption and reputational damage.
CBS-4	ATM and Card Services	Enables cash withdrawal, card payments, and card-based access through debit, credit, or prepaid cards.	Customers cannot withdraw cash or complete card transactions.
CBS-5	Loan Origination and Loan Servicing	Supports personal, salary, home, auto, business, and corporate loan processing and servicing.	Borrowers cannot apply for loans, receive disbursements, make repayments, or obtain loan support.
CBS-6	Cash Management and Payroll Services	Supports business clients through check writing, deposit pick-up, and payroll account arrangements.	Corporate clients may fail to pay employees or manage operating cash flows.
CBS-7	Customer Support, Complaints, and Service Recovery	Provides customer assistance during normal operations and disruptions.	Customer harm increases because issues cannot be reported, triaged, or resolved.
CBS-8	Regulatory Reporting and Compliance Operations	Enables timely reporting to BSP and other regulators, including operational disruption reporting.	Delayed regulatory reporting, compliance breaches, and supervisory scrutiny.

Applying BSP Circular No. 1203 to CBS Identification

BSP Circular No. 1203 requires banks to have board-approved criteria for identifying and prioritising critical operations. These criteria should consider the impact of disruption on the bank’s viability, customers, and role in the financial system.

The identified critical operations should be proportionate to the bank’s size, nature, and complexity.

For Equicom Savings Bank, this means CBS should not be selected solely because it is operationally important internally.

They should be selected because disruption could materially affect customers, the bank’s safety and soundness, regulatory obligations, or the wider banking ecosystem.

Examples of Regulatory Operational Resilience Requirements

BSP Requirement	What It Means for Equicom Savings Bank	Example
Identify critical operations	Determine which customer-facing services must remain available during disruption.	Deposit access, online banking, ATM/card services, payments, and loan servicing.
Set tolerance for disruption	Define the maximum acceptable disruption level for each CBS.	Online banking must be restored within an approved timeframe before customer harm becomes intolerable.
Map interconnections and interdependencies	Identify the people, processes, technology, third parties, facilities, and data that support each CBS.	Payments may depend on core banking, network connectivity, third-party payment rails, cybersecurity controls, and customer service.
Test severe but plausible scenarios	Validate whether the bank can continue delivering CBS during major disruptions.	Cyberattack on online banking, core banking outage, ATM network failure, and third-party payment provider disruption.
Integrate BCM and operational resilience	Ensure business continuity plans cover CBS and their tolerances.	BCPs must support the continuation of deposit, payments, and digital banking services within the approved tolerance.
Report material disruptions	Notify BSP of disruptions affecting critical operations, including impact and recovery actions.	Report a prolonged digital banking outage affecting customer transactions.

Recommended CBS Prioritisation for Equicom Savings Bank

For initial operational resilience implementation, Equicom Savings Bank should prioritise the following five CBS:

Deposit and Account Services
Payments and Funds Transfer Services
Digital Banking and Online/Phone Banking
ATM and Card Services
Loan Servicing and Repayment Operations

These services are most closely linked to customer access to funds, payment obligations, financial continuity, and confidence in the bank.

They also provide a practical starting point for mapping dependencies, setting disruption tolerances, and designing severe but plausible scenario tests.

Identifying Critical Business Services enables Equicom Savings Bank to shift from a traditional function-based continuity approach to an end-to-end service resilience approach.

By focusing on customer-facing services such as deposits, payments, digital banking, cards, and loan servicing, the bank can better understand where disruption would cause intolerable harm and where resilience investment should be prioritised.

In line with BSP Circular No. 1203, Equicom Savings Bank should formally approve its CBS criteria, maintain a living inventory of critical operations, map the resources supporting each service, define tolerance for disruption, and test its ability to continue delivering these services under severe but plausible scenarios.

This will provide the foundation for a practical and regulator-aligned operational resilience programme.

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