Business continuity planning (BCP) is essential for safeguarding your financial institution’s (FI’s) operations, whether you’re facing natural disasters, cyber threats, or internal incidents. It goes beyond preparation — it involves cultivating resilience, establishing robust recovery strategies, and developing effective contingency plans.
Is your BCP current and comprehensive? Review these 10 best practices to ensure your FI remains resilient regardless of the incidents you face.
Develop function-based recovery plans that cover critical business processes rather than scenario-based ones. When performed correctly, function-based recovery plans will work no matter the situation. Scenario-based plans will overcomplicate your plan by trying to account for every possible scenario.
Focus on high-level concerns, such as the impact of losing customer service and/or data, facilities, or critical staff. Recovery should be about the business function's continuity, not the specific cause of the disruption (e.g., fire vs. hurricane).
Related: A Guide to Operational Resilience for Financial Institutions
Like your recovery plans, your recovery teams should be function-based and include team members who know the function well and how to recover it. Ensure that recovery plans cover specific tasks within each department. For instance, a mortgage department may require multiple team members focused on different stages of the loan process.
Having clear team roles and responsibilities will improve recovery efficiency and minimize confusion.
Now, more than ever, third parties, such as IT, network and cyber security services, payment processors, cloud services, and even generator service providers, are essential to your business continuity plans.
Prioritize these relationships by using a simple scale to rate vendor reliance. For example, a "low" rating may indicate the vendor is easily and quickly replaceable, while a "high" rating means the vendor is irreplaceable during a disruption. This system will help categorize which vendors to develop a communication plan with and coordinate recovery while they're down. Ensure you have up-to-date contact information for all critical vendors and that these contacts know the game plan.
Additionally, your service level agreements (SLAs) should clearly outline how quickly vendors must respond to disruptions and restore services to meet your recovery needs.
Related: TPRM 101: What is a Vendor Risk Assessment
The appropriate people should drive business continuity. Decisive action will be vital to success, and having “too many cooks in the kitchen” will slow this process. Focus on the essential personnel who can restore key functions.
Once essential workers have been identified, they should receive appropriate training to perform their duties effectively and efficiently when the time comes.
Related: Employee Security Awareness Training Best Practices for FIs
A comprehensive BCP includes several components, including roles and responsibilities, the critical function impact of loss, manual workaround or recovery procedures, backup and recovery solutions, and guidelines for communication with staff, customers, and regulators.
The plan should follow a consistent formatting structure approved by stakeholders to keep it simple, easy to understand, and implement. If a team member has trouble understanding a procedure, that’s a sign that your documentation needs to be reviewed and updated.
Related: Business Continuity Planning and Disaster Recovery: The Differences
Companies use multiple communication channels — email, video calls, messaging apps, and in-person meetings — to support daily operations. However, this variety can lead to fragmented messaging and delays during a crisis.
Standardize your messaging plan. For instance, automated communication platforms address this by centralizing updates and ensuring all stakeholders receive consistent and timely information.
Listen: Communication & Collaboration: Applying the 3 Lines Model
Along with training, employees from key departments — information technology, customer service, compliance, etc. — will need resources to maintain essential operations. Know your resource game plan. For instance, if your plan for onsite staff is to relocate to an alternate facility, ensure you have enough laptops, desktops, and other critical devices for the essential workers at that site. If the plan is to work remotely, ensure those staff members’ offices are equipped and secure and they work from home consistently before the disaster, so there are no missing resource surprises.
Also, consider resources beyond basic IT infrastructure, including water, food, office supplies, medical supplies, and space for staff. Inventory these resources and regularly review them to ensure they are fresh and well stocked.
Plan for access to alternative locations and understand their strategic value. In addition to office space, consider logistical needs. Does the location support key functions, such as customer service or data recovery?
Identify strategic branches to keep your operations running at reduced capacity if needed. This step is crucial for companies with multiple locations.
Access to your BCP should be automated. Since your essential workforce is likely distributed or will be distributed during a disaster, access anytime, anywhere is a necessity.
Consolidate your instructions and protocols in one place, ensuring they are current, remotely accessible, and backed by IT redundancy. Centralized digital access promotes consistency, minimizes errors, and supports timely decision-making during a crisis.
Recognize and address interdependencies between departments. For example, deposit operations may rely on accounting, IT, and lending departments for specific needs. Understanding these connections ensures that your continuity plan addresses individual departmental needs and how departments interact.
Related: RTO vs. RPO for Business Continuity: What’s the Difference?
Ready to take your BCP to the next level? Learn about the features your FI needs to support effective BCP planning and management in our buyer’s guide.