Banks must be able to withstand major disruptions – BSP
THE central bank has issued the guidelines on business continuity management (BCM) that requires particularly banks to make it an integral part of their operations so that they can withstand the impact of major disruptions.
In a circular, the Bangko Sentral ng Pilipinas (BSP) said the rationale for the new rules is for super adversely affected by disruption of critical operations due to internal and external threats, which may be natural, man-made or technical in origin may still continue to operate and service its clients.
It said extreme events may cause major disruptions whose impact are very broad in scope, duration or both and can pose a substantial risk to the continued operation of BSFls.
“Because BSFIs play a crucial role as a whole, it is important to ensure that their operations can withstand the effects of major disruptions,” the central bank noted.
With these scenarios, the BSP said BSFIs need to have a comprehensive BCM process as an integral part of their operational risk management system.
In particular, BSFIs should adopt a cyclical, process-oriented BCM phases: business impact analysis (BIA) and risk assessment, strategy formulation, plan development, plan testing and personnel training and plan maintenance.
This framework represents a continuous cycle that should evolve over time based on changes in business and operating environment, audit recommendations and test results, the central bank said.
This framework should cover each business function and the technology that supports it. Other related policies, standards and processes should also be integrated with the overall BCM framework, it added.
A well-designed BCM process enables BSFIs to resume critical