Continuity in the financial institutions

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On the topic of Business Continuity, often I happen to have conversations on the edge of the surreal with some of the characters playing roles of great responsibility in the Authority's financial sector.

On the topic of Business Continuity, often I happen to have conversations on the edge of the surreal with some of the characters playing roles of great responsibility in the Authority’s financial sector. In a country like ours – that succeeds even in turning a trivial rainy day into a catastrophe – it is clear that we should seriously invest in training on the principles of continuity management. On the contrary, the message coming from those who should have a leading role in this process of cultural growth, I heard even say – quote – that ‘the issue is overcome.’ If it were not serious, such a delirium would even make someone smile. However, since it is very serious, we try to understand and promptly remove the ridiculous argument raised to support this thesis:

The Business Continuity matter is known for some time and, over the years, has been covered by different regulations at national and international levels that have forced financial institutions to take care of this issue. So further investment in training and awareness is of little use. To date, the priorities are different.

It would be almost like sustaining that ‘given that murder is despicable practice since the days of Cain and Abel, it is useless to invest more in the training of security forces’. The experts – with the proper competence in Business Continuity – know very well that:

  1. the Business Continuity Management System is based on the Deming Cycle and provides a continuous improvement through constant commitment over time;
  2. different financial institutions, despite regulatory obligations, have always neglected the importance of substantial matters (paying the consequences in case of critical events, as made evident by many case studies on it);
  3. Managers, unfortunately too many, have preferred to limit the subject to the mere fulfillment of regulatory requirements by producing – with the support of so-called ‘consultants’ – bundles of paper useful only to increase the dust on the shelves.

It is the usual difference between those who act just to put a check on the ‘done!’ box and those who  responsibly, put their intelligence at the service of the protection of their company. Many professionals who deal with business continuity in the Financial Institutions, in my opinion, have yet to decide which side to take. The problem is anything but ‘resolved’ and the theme is as timely as ever, despite that many other critical issues did emerge for the sector as a result of the ongoing financial crisis. So we have to think: who is going to benefit from a successful implementation of a Business Continuity Management System? Is it an advantage to the Regulator who do their best to be perceived as mere producers of bureaucracy or to companies that have to ensure sustainability in their business model?

The answer is obvious only to those who did have the tenacity and the enlightment needed to implement a robust business continuity in the organization. Investing seriously in Business Continuity is not only right but it is necessary to obtain greater profits. This is the result of a study conducted by Professor Ian Mitroff, professor at the University of Southern California – Marshall School of Business and the Berkeley University and considered the father of the academic theories on crisis management. It is now an empirical evidence.

And for those who still are not convinced and need a further incentive to devote themselves to business continuity, how not to mention the recent inclusion of the ISO 22301: 2012 (International standard reference on the subject) in the list of European Norms recognized by the European Standardization Organizations? Yes, this standard could become a legally binding norm for the Critical Infrastructures (therefore applicable to the Financial Institutions of considerable size) if the European Parliament decided to regulate the minimum level of continuity of systemically important organizations. Many international companies are in fact taking a certification path and it is a fact that also some Italian financial institution have considered it.

Nor should we confuse – as do several Authority of the financial sector – the continuity with the ‘continuity of service’ (otherwise known as service continuity), or the ability to prevent and manage breaks for those processes / products visible to the public or to the Regulator. Focusing on the continuity of the treasury, the Euro clearing, trading and other services crucial for banks is not sufficient in the absence of a Management System implemented using a holistic approach and which provides a continuity plan for all the departments in the company in case of interruption. So how serious is it, to think exclusively to the resilience of computer systems or not to involve top management in the exercises at all levels (from the Simulation Scenario Crisis to the test evacuation procedures)?

Among the Italian financial institutions, these are all very common mistakes caused by a lack of culture and awareness of the importance of the issue. The professionals certified by the Business Continuity Institute (www.thebci.org), moreover, are still too few compared to the Anglo-Saxon world – historically most advanced of these materials – both in firms and in the consulting firm. This cultural gap is evident and it creates complexity and costs easily avoidable.

For this reason HI CARE Association and PANTA RAY, Licensed Training Partner of the BCI in Italy, have decided to play a key role in the establishment of the first BCI Italian Forum (www.thebci.it), which is the first network of professionals Business Continuity affiliates of the BCI in Italy. The goal of the Association, in this particular context, is to create a system and assist the managers so that they can share any critical issue concerning the crisis management and business continuity. The objectives are to raise the level of awareness of the importance of these matters through the exchange of best practices, accessing the training programs of the Business Continuity Institute at a discounted rate and the organization of events dedicated to professionals from different fields.

In other words, we want to help building a generation of professionals who are leaders, are aware and see the Business Continuity as a key principle for sustainability not only of the organizations, but related to the socio-economic system as a whole. All this to avoid the pain, in the future, of having to listen to too many bestialities that today unfortunately surround a subject that in Italy is still only pioneering.

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PANTA RAY is a training and management consulting firm, specialized in organizational resilience.

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