[CM] [OCBC] [E1] [C4] CM Vs BCM

Chapter 4

Introduction

In today's dynamic financial landscape, both crisis management and business continuity management (BCM) play pivotal roles in ensuring organisational resilience.

For a leading financial institution like OCBC Bank, the ability to differentiate between a crisis and a disaster—and respond appropriately—is critical for maintaining operational stability.

This chapter delves into the distinct roles of crisis management and BCM, outlines the differences between "disasters" and "crisis scenarios," and demonstrates how OCBC Bank, in alignment with ISO 22361 and the Monetary Authority of Singapore (MAS) guidelines, approaches these two areas.

Crisis Management vs. Business Continuity Management

At the core of crisis management and BCM lies the need for timely, decisive action during a disruptive event, but the focus and scope of each discipline differ significantly.

Crisis Management

• According to BCMPedia, crisis management refers to the strategies and processes implemented to address immediate, high-impact, and often unpredictable events that could severely harm an organisation’s reputation, operations, or financial stability.
• Crisis management involves managing the response to an event with the primary goal of limiting the damage to the organisation, restoring normalcy, and protecting stakeholder interests.
• Crisis management focuses on high-level decision-making, communication, and maintaining control over the situation.

Business Continuity Management (BCM)

• On the other hand, BCM is about ensuring the continuity of critical business functions during and after a disruptive event.
• As defined by BCMPedia, it involves planning and preparing for potential disruptions (such as disasters) to ensure that key processes can continue or be quickly resumed.
• BCM focuses on recovery strategies, such as IT disaster recovery, facility management, and staff availability, to ensure that the organisation can maintain its core operations even in the face of significant challenges.

While crisis management typically deals with reacting to and managing a crisis as it unfolds, BCM takes a proactive approach by implementing measures that ensure continuity or quick restoration of critical functions after a disaster.

Disaster vs. Crisis Scenario

The difference between a "disaster" and a "crisis scenario" is another critical distinction for financial institutions like OCBC Bank. Understanding this difference ensures that appropriate measures are applied at each stage of the crisis lifecycle.

Disaster

A disaster is an event that results in widespread disruption, destruction, or severe damage to an organisation’s operations, facilities, or resources.

BCMPedia defines it as a significant, often uncontrollable event (natural or man-made) that impacts an organisation's ability to function. For OCBC Bank, examples of disasters could include:

• • A data centre outage due to a fire or flood.
  • A cyberattack that compromises critical customer data.
  • A pandemic that affects staff availability and operational capacity.

Business Continuity Management comes into play by ensuring that OCBC Bank can maintain its operations during such a disaster or recover from it with minimal downtime.

BCM ensures the bank has effective disaster recovery plans in place for IT systems, physical infrastructure, and human resources to handle such catastrophic events.

Crisis Scenario

A crisis scenario, as defined by BCMPedia, refers to a situation that presents immediate and significant risks to an organisation’s reputation, financial position, or operational viability.

A crisis may not necessarily involve physical destruction or loss of life, but it can lead to severe consequences for the organisation’s public image or business relationships. Crisis scenarios can arise from:

• • A fraud investigation or regulatory breach that threatens customer trust.
  • A public relations disaster triggered by poor customer service or product failures.
  • A high-profile scandal involving key executives.

In these cases, crisis management protocols are activated to address the immediate public perception and media attention.

OCBC Bank, for example, would rely on its crisis management team to provide rapid communication, manage stakeholders, and mitigate reputational damage. In contrast, the business continuity team works on ensuring operational stability.

Compliance with ISO 22361 and MAS Guidelines

OCBC Bank’s approach to crisis management and BCM is framed within the guidelines of ISO 22361, which sets the standard for crisis management.

According to ISO 22361, organisations must have structured crisis management processes in place to handle incidents that could disrupt business operations, with a focus on leadership, communication, and decision-making.

The Monetary Authority of Singapore (MAS) requires financial institutions to have robust BCM programs to ensure continuity of critical banking services during a disaster.

The MAS’s Technology Risk Management Guidelines and Business Continuity Planning requirements emphasise the importance of ensuring operational resilience in the face of threats such as cyberattacks, pandemics, or financial crises.

These frameworks are designed to ensure that both crisis management and BCM are aligned and integrated, with clearly defined roles and responsibilities for both disciplines.

While both crisis management and business continuity management are essential for OCBC Bank’s resilience, their roles and focus are distinct.

Crisis management addresses the immediate response to crises and aims to minimise the damage, while BCM ensures that critical functions can continue or recover in the face of disasters.

Understanding the difference between a "disaster" and a "crisis scenario" allows OCBC Bank to respond appropriately, safeguarding its reputation, operational integrity, and compliance with regulatory requirements set by MAS.

By integrating both crisis management and BCM, OCBC Bank can continue to deliver trusted financial services even in times of crisis, ensuring resilience in an ever-evolving financial environment.