Fine-tuning the survival instinct
September 11 awakened financial institutions to the inadequacies of their business continuity systems. Across the industry, much thinking has been done about how to implement such systems. But in the course of the past year, some firms have nodded off again.
When the World Trade Centre was hit by terrorists last year, 60% of telephone land lines in lower Manhattan were put out of action. Large institutions' communication systems were hit hard and the New York financial markets were forced to close for four days.
A year on, how much better prepared to cope with systemic disaster is the financial services industry? In the weeks and months following September 11, continuity planning and operational resilience (nobody, it seems, cares to use the phrase disaster recovery) was a priority for every business. Institutions that had been well prepared realized that no plan is perfect and set to work on those issues they had not thought to plan for. Firms that were less well prepared looked to step up their business continuity plans and some that were ill prepared began to think seriously about the issue.
Everyone became acutely aware of the range of deleterious effects loss of continuity could bring. As consultants Celent Communications put it in an October 2001 report: "Lost sales opportunities and the loss of reputation and customer goodwill are difficult to calculate, but in a trust-based industry like financial services, any failure of service can result in losses from which recovery may be very difficult indeed."