Business continuity vs disaster recovery, know the difference!

Ensuring Bank Resilience in the Face of Disruptions (with East African Case Study)

By Stella Makona Simiyu – Chair BCI East Africa Chapter and Head of Managed Services at Sentinel Africa Consulting

In the financial sector, where trust and reliability are paramount, ensuring uninterrupted operations is non-negotiable.Banks face a myriad of potential disruptions, ranging from natural disasters like the recent floods in Eastern Africa to infrastructural failures such as the recent submarine cable cuts, cyberattacks, hardware failures, and human errors. To safeguard their operations and maintain customer confidence, banks need to differentiate between Business Continuity (BC) and Disaster Recovery (DR), two distinct but interconnected aspects of operational resilience.

Business Continuity (BC): The Proactive Approach

BC focuses on maintaining essential business functions during and after a disruptive event. It’s about having a plan to keep the bank running, even if some systems or processes are affected.

Example (East Africa): A bank in Kenya faces widespread internet outages due to a submarine cable cut. The BC plan would dictate how to switch to backup internet providers, enable offline transaction capabilities for customers, and ensure continued access to funds through mobile banking or alternative channels.

Benefits of Business Continuity:

• Minimized downtime and financial losses
• Preservation of customer trust and brand reputation
• Improved regulatory compliance
• Enhanced organizational resilience and adaptability

Challenges in Business Continuity:

• Identifying and prioritizing critical business functions
• Developing comprehensive and up-to-date plans
• Ensuring staff awareness and training
• Allocating sufficient resources for BC initiatives

Disaster Recovery (DR): The Reactive Approach

DR focuses on restoring systems and data after a disaster has occurred. It’s about getting the bank back to normal operations as quickly as possible.

Example (East Africa): A flood severely damages a bank’s branch in Tanzania. The DR plan would involve recovering data from backups, relocating operations to an alternate site, and setting up temporary infrastructure to ensure continued customer service.

Benefits of Disaster Recovery:

• Rapid restoration of critical systems and data
• Minimized data loss and corruption
• Improved ability to meet regulatory requirements
• Enhanced organizational resilience and adaptability

Challenges in Disaster Recovery:

• Maintaining up-to-date backups and recovery procedures
• Ensuring adequate testing and validation of DR plans
• Managing the cost and complexity of DR solutions
• Coordinating recovery efforts across multiple systems and locations

The Board’s Role in BC/DR Oversight

The board of directors plays a crucial role in overseeing the bank’s BC/DR efforts. They should:

• Understand the bank’s critical business functions and the potential impact of various disruptions, including those specific to their region (e.g., floods, cable cuts).
• Approve and review the bank’s BC/DR plans regularly, ensuring they address region-specific risks.
• Ensure adequate resources are allocated to BC/DR initiatives.
• Monitor the effectiveness of BC/DR testing and exercises, including simulations of regional disasters.
• Hold management accountable for implementing and maintaining effective BC/DR programs.

In conclusion,

Business Continuity and Disaster Recovery are essential components of a bank’s operational resilience strategy. By proactively planning for disruptions, including those specific to their region, and having robust recovery mechanisms in place, banks can protect their assets, maintain customer trust, and ensure long-term sustainability even in the face of adversity. The recent events in East Africa serve as a stark reminder of the importance of preparedness and the need for comprehensive BC/DR plans.

We help organisations set up Business Continuity Management by implementing a business continuity management system (BCMS); the international standard ISO 22301 which outlines the best practices for implementing a BCMS. This entails creating Business Continuity Plans (BCP) to address and safeguard against identified risks.

Reach out to us to begin your Organisation’s journey in Implementing Business Continuity

Why should you certify to ISO 22301?

ISO 22301 establishes the standards for a BCMS and is widely recognized as the most reliable framework for ensuring effective BCM. – Talk to us – [email protected]