Crisis Management And Business Continuity Planning In Financial Institutions – It analyzes how to manage different types of conflicts that can occur in your devices. If 2020 has shown us anything, it’s that we must adapt to external factors that can affect your team’s processes and procedures. Let’s start with a problem management plan.
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Crisis Management And Business Continuity Planning In Financial Institutions
A crisis can take many forms, such as a natural disaster, global disaster, power and water loss, cyber attack, operational accident, threats of violence, or supply problems. In a production environment, a crisis is defined as an unexpected event or situation that may threaten the organization’s business, cause harm to the health and safety of employees and consumers, disrupt operations, or damage the company’s brand or reputation. Organizational response and crisis outcomes can vary greatly from company to company, depending on factors such as crisis preparedness, maturity, size and scale of operations, and financial viability. The COVID-19 pandemic has made many organizations aware of weaknesses in anticipating, preparing for, responding to and managing disasters. There was a renewed awareness of the importance of a robust crisis management plan (CMP) and focus on business continuity.
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Planning can help an organization manage and minimize the negative effects of a crisis. An organization’s response to a crisis speaks to its culture and reflects its leadership. How business leaders prepare for and respond to disruptive events can determine how resilient and resilient they are.
In a 2018 Deloitte survey of organizations worldwide, 47% of those without a crisis management plan reported that their finances had been adversely affected by the recent crisis, compared to 31% of those with one.
Similarly, PwC’s 2019 global crisis survey of organizations in different industries around the world found that organizations that emerged stronger from the crisis had put in place preparatory measures (such as having a CMP) in anticipation of the crisis.
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Recognizes the importance of crisis management and how having a process affects business continuity. GMP registration and certification programs include requirements for organizations to implement CMP to address critical or emergency situations that may affect their ability to provide a safe product. The purpose of the CMP is to prepare the organization to respond quickly to a crisis, minimize damage, and restore operations efficiently and effectively.
Business continuity and implementation of the CMP is the responsibility of each employee, department, crisis management plan team, executive management and board of directors.
The first step is to identify industry threats and those unique to your organization, location or region, markets, products and processes. Once identified, assess the likelihood of threats and the expected severity of impact. Then, identify the warning signs for each crisis. These assessments will help prioritize actions and allocate resources.
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According to PwC’s 2019 global research, three qualities make up successful crisis management: preparation, a fact-based approach and effective stakeholder communication. The study also found that while it is a positive sign that many senior executives want to own and participate in crisis preparation and response, overlapping roles and responsibilities can occur. This can affect effective and efficient coordination, communication and decision-making in times of crisis.
The CMP serves as a guide for the organization to navigate the different scenarios that can arise from a crisis and who is responsible for each aspect. An effective CMP has the following features:
To implement CMP quickly during a crisis, it is important to conduct frequent exercises or simulations to test the plan. Practices or exercises for different crisis situations can reveal an organization’s capabilities as well as gaps in preparedness. After the challenge, the team should analyze what went well and what didn’t, and update the CMP accordingly. When testing a risk management plan, the organization must include the impact on product safety and the safety of its employees.
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Providing disaster management training and involving all staff in test situations will make them familiar with the CMP. This will enable employees to be proactive when problems arise, as well as know who to report to.
Organizational business interruptions can occur when you least expect it, so it is important for the organization to look ahead and assess potential threats, whether internal or external. As the business environment changes, the CMP may also need to be updated. The CMP should be reviewed regularly to ensure that it will still be effective in the event of a real crisis.
In addition to having a CMP to quickly respond to a crisis, the organization must also have a plan to continue operations during an incident and recover from the crisis. Business continuity planning is an ongoing process to ensure that steps are taken to identify the impact of a potential loss and maintain appropriate recovery strategies, recovery plans and service continuity.
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The process of creating a BCP is similar to creating a CMP. BCP includes all risks (human-caused events, technological issues and natural hazards) and risk assessment to understand the business impact on people, infrastructure, operations, environment, economic conditions, obligations and regulatory and contractual characteristics. The analysis identifies what is an unacceptable impact on the loss of information, key processes, performance and usage, among other things.
Senior management then develops a prevention strategy based on the results of risk identification and assessment, impact analysis, program constraints, operational experience and cost benefit analysis. Prevention includes training, monitoring of the quality management system, testing the BCP at certain intervals, and conducting exercises to ensure the program is working. Finally, mitigation strategies should be implemented to ensure that steps are taken to reduce or control the consequences, scope or severity of an unavoidable event.
When developing a BCP, consider factors such as the regulatory environment, contractual obligations, financial resources and infrastructure. Senior management’s commitment to deploying resources to ensure recovery and business continuity will ensure a solid business continuity plan.
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Developing a CMP and BCP requires resources, time and effort, but it is important that the organization remains alert to new threats that may arise while continuing to monitor existing ones. The COVID-19 pandemic has shown that crisis can occur unexpectedly and from unexpected sources. An organization can emerge better, stronger and more resilient from a crisis if it can anticipate and assess potential threats and have a plan in place to respond and recover quickly. A business continuity plan (BCP) is a system to prevent and recover from potential threats to a company. The plan ensures that personnel and assets are protected and can act quickly in the event of a disaster.
BCP involves defining all the risks that can affect the company’s operations, making it an important part of the organization’s risk management strategy. Risks can include natural disasters (fires, floods or weather-related events) and cyber attacks. Once the risks have been identified, the plan should also include:
BCPs are an important part of any business. Threats and disruptions mean lost revenue and increased costs, resulting in lower profits. And companies cannot rely on insurance alone because it does not cover all costs and customers move to the competition. It is generally formulated in advance and involves input from key stakeholders and staff.
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Business impact analysis, recovery, organization and training are steps companies must take when creating a business continuity plan.
Businesses face a number of disasters ranging from minor to catastrophic. Business continuity planning usually aims to help businesses continue operating in the event of a major disaster, such as a fire. BCPs are different from a disaster recovery plan, which focuses on restoring a company’s IT system after a crisis.
Consider a financial company headquartered in a major city. You can keep BCP in place by taking steps such as backing up your computer and client files off-site. If something were to happen to the corporate office of the company, its satellite offices would still have access to important information.
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An important point to note is that BCP may not be effective if a large proportion of the population is affected, such as in an outbreak. However, BCPs can improve risk management, preventing disruptions from spreading. They can also help reduce network or technology downtime, saving businesses money.
A business may also find it helpful to create a checklist that includes important information such as emergency contact information, a list of resources the business continuity team may need, where backup data is hosted or stored, and other important information and other key personnel.
Along with testing the continuity team, the company should also test the BCP itself. It should be tested several times to ensure that it can be used for many different risk situations. This will help identify weaknesses
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