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 The
largest financial services and futures industries firms are well
prepared to respond to a major threat or potential disaster, while
smaller firms lag behind, according to the results of a new study
conducted by the Tellefsen Consulting Group, Inc (TCG), a leading
Wall Street management and technology consulting firm. The survey
also revealed that more than three quarters of firms’ efforts
emphasised both business continuity and disaster recovery readiness.
Half of large firms say they are ‘very well prepared’
to respond to a major disaster or threat situation, while most small
firms rate themselves as being ‘adequately’ prepared.
15 percent of small firm rate themselves as ‘in fair shape’
compared with 32 percent of large firms.
“Larger firms may have had larger budgets
to develop their plans, as they appear overall to be better able
to respond to a disaster," commented John Rapa, president and
CEO of Tellefsen Consulting Group, Inc. "In general, smaller
firms have not been the target and focus for much of the DR and
BC planning approaches presently adopted by their larger counterparts.”
Differences in planning among large and small firms were noted.
67 percent of small firms and 43 percent of large firms reported
their timeframes for recovery and operation of mission-critical
operations and technology functions as being two hours or less.
Large firms distribute BC/DR plans more widely to their staff than
smaller firms; 80 percent of large firms indicate distribution to
all employees, compared with 40 percent of small firms. Unlike large
firms, small firms have not supplemented Property and Casualty Insurance
with supplemental Catastrophic Risk coverage - possibly for cost
purposes - and have indicated no future plan to obtain any.
A key finding of the survey revealed that 85
percent of the largest financial services and futures industry firms
have adopted both business continuity and disaster recovery plans.
Most firms have a dedicated person or group accountable for BC/DR
planning and budgeting and firms conduct planning on a centralised
basis.
“Most have gotten the message and have
relatively mature DR and emerging BC plans; the survey indicates
that most firms developed and implemented their BC/DR plans within
the last two years,” noted John Rapa, president and CEO of
TCG. The survey also revealed that 15 percent are without BC plans.
“Most firms appear to be more ready for disaster recovery
than business continuity, probably because firms have had DR plans
longer and have been regularly prepared for system failovers,”
noted Mr. Rapa.
The TCG survey, which was conducted concurrent to the August 2003
Northeast blackout, provides a strong indication of the preparedness
of a representative cross-section of financial services firms, across
twelve major areas of disaster recovery/business continuity planning
and related activities. Survey respondents included equity, options
and futures exchanges, clearing corporations, futures commission
merchants, investment banks, key service providers, regulators and
securities broker-dealers; responses were evenly distributed among
small (54 percent) and large (46 percent) firms. Small firms were
defined as those with less than 250 employees and large firms as
those with more than 250.
Turning to how firms cope with risk management, indications were
mixed. On the one hand, 67 percent of all respondents’ BC/DR
plans include the definitions and procedures for response to threats
and disaster situations; on the other, firms provided a low self-assessment
of preparedness to support recovery operations. 32 percent of large
firms that assessed their strategy, readiness and procedures to
support recovery activities reported that they were not prepared,
while just 16 percent said they were well prepared. Additionally,
only 25 percent of firms use or maintain a crisis management system.
The TCG survey includes comprehensive responses on BC/DR program
management, prevention and preparedness, risk management, crisis
management, recovery operations, data integrity and record retention,
testing/preparedness and HR/staff and counter party contact information,
hardware/ software/network inventories, physical facilities and
locations, life safety and subsistence and PR and regulatory contacts.
Copies of the survey and a 64-page findings report of the present
state of financial services and futures industry readiness is available
here.
•Date:
11th November 2003 •Region: N.America •Type:
Article •Topic: BC
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