UK "must strengthen BCP"

LONDON – The UK financial services sector would be highly resilient in the face of a terrorist attack or a natural disaster but more work needs to be done to strengthen business continuity planning (BCP), according to a new report.

The Tripartite Authorities – the Financial Services Authority (FSA), HM Treasury and the Bank of England – have published the findings in their Feedback statement on the resilience benchmarking project discussion paper.

Disclosures contained in the document reveal a desire by financial services firms to gain a better understanding of how the emergency services and utilities companies would respond to keep power, water and telecommunications running in the event of a major disruption.

Although the Authorities questioned respondents as to whether they would be able to recover 60-100% of normal business values and volumes by the next working day under current continuity plans, respondents noted that their priority is to ensure that pending material transactions could be settled by the end of the business day with the ability to support actual business transacted on the next working day as their secondary goal.

The statement also proposes issuing guidance on a minimum distance between the primary site of business and the recovery site although many respondents felt that geographical distance should be a secondary consideration after ensuring that companies diversify so that they are not exposed to the same disruptions, such as having all firms dependent on the same power grid or water supply. The statement claims that the cost of implementing better business continuity practices should be negligible.

"It is encouraging that the project has established that the core parts of the financial system appear to have highly resilient IT systems that allow them to recover critical functions with impressive speed. This stands the sector as a whole in good stead and confirms to us that we do not at this stage need to write detailed rules telling firms what business continuity arrangements they should adopt," said Hector Sants, managing director of the FSA's wholesale firms division.

The statement can be found in full on the FSA website: http://www.fsa.gov.uk OR&C