[OR] [RBI] [13] Business Continuity Planning and Testing

Business Continuity Planning and Testing for Financial Institutions

Business continuity planning and testing are crucial practices that ensure an organisation can maintain or quickly resume critical functions during and after a disruption.

This involves developing comprehensive plans that outline how to operate under various emergency scenarios and regularly testing these plans to identify weaknesses and areas for improvement.

By preparing in advance and validating the effectiveness of these plans through rigorous testing, organizations can minimise downtime, protect their assets, and ensure that they can continue to meet their obligations to customers, employees, and stakeholders, even in the face of unexpected challenges.

Principle 13: Ensuring Ongoing Operations through Disruptions

To ensure ongoing operations and limit losses during severe business disruptions, REs (financial institutions) must have robust business continuity plans integrated with their Operational Risk Management Framework (ORMF). Regular testing of these plans under various severe but plausible scenarios is essential.

Critical Components of Effective Business Continuity Planning

Governance and Oversight

• Board of Directors. Regularly review and approve the BC Plan.
• Senior Management and Business Units. Actively involved in BC Plan implementation.
• First and Second Lines of Defence. Commit to BC Plan design.
• Third Line of Defence. Conduct regular reviews.

Forward-Looking Planning

• Scenario Analysis. Identify potential disruptions, critical operations, and dependencies.
• Impact Assessment. Conduct quantitative and qualitative impact analyses for each scenario.
• Activation Thresholds. Set limits (e.g., maximum tolerable outage) for activating BCP.
• Recovery Procedures. Define recovery time objectives (RTO) and recovery point objectives (RPO) and establish stakeholder communication guidelines.

Regular Testing and Training

• Conduct exercises encompassing critical operations and dependencies, including third parties and intragroup entities.
• Test BC Plans under severe scenarios to ensure staff awareness and effective incident response.
• Provide customised training based on specific cases.

Disaster Recovery Guidance

• Establish roles and responsibilities for managing disruptions.
• Define succession of authority and internal decision-making processes during disruptions.
• Specify triggers for invoking the BC Plan.

Consistency with Operational Resilience

• Ensure BC Plans align with recovery and resolution plans.
• Review and update BC Plans periodically to reflect current operations, risks, and threats.
• Test recovery and resumption objectives regularly, including with service providers.

Pandemic Preparedness

• Develop comprehensive plans to address low staff availability during pandemics.
• Align pandemic response plans with the ORMF to ensure organizational-wide preparedness.
• By incorporating these elements, REs can ensure that their business continuity plans are robust, effective, and capable of maintaining critical operations through various disruptions.

More Information About Blended Learning OR-5000 [OR-5] or OR-300 [OR-3]

To learn more about the course and schedule, click the buttons below for the OR-3 Blended Learning OR-300 Operational Resilience Implementer course and the OR-5 Blended Learning OR-5000 Operational Resilience Expert Implementer course.