When the unexpected happens.

• Author: Proctor, Ken
• Position: Fundamentals - Brief Article

A business disruption can be as simple as a power failure or as complex as a terrorist attack. Regardless, you will need to have a plan to minimize interruptions to both your bank and your customers. Marketers have a role in this readiness process.

In a scene that could only be imagined by a Far Side cartoonist Gary Larson, office buildings burned while flood waters swirled several feet deep, preventing firefighters from battling the blaze, On April 18, 1997, after a winter of record snowfall, the swollen Red River of the North breached its banks and flooded Grand Forks, N.D. Within hours, a catastrophic fire erupted, burning 11 buildings in the center of old downtown. Three of the buildings belonged to the First National Bank.

The effect of the disaster could have been catastrophic for the bank. Fortunately, however, as the waters rose on Friday night, the bank moved its computers to a branch office 80 miles away. Employees who had sought safety in local shelters or left the area were contacted and mobilized. By Saturday night, the bank's main offices were gone, but its computer systems were up and running, along with much of the bank's supporting operations.

While many banks have planned for the worst, it's doubtful that many of them have considered the likelihood of a disaster of this magnitude. Although they might be able to recover from a minor business interruption without a formal plan, all financial institutions require comprehensive planning in order to respond to a catastrophe. Such plans are not only prudent, but also are required by bank regulators. Unfortunately, many disaster-recovery plans don't go far enough. Some rely on their data services provider to develop and maintain contingency plans. Others prepare only cursory plans or only make plans for the recovery of data processing operations--without considering such issues as telecommunications, office space for critical operations or the effects on their customers.

Disaster planning is an area that marketers can play a role, particularly in regard to such important issues as media management and public relations.

Beyond planning for the recovery and restoration of data-processing services, banks must also consider a number of other issues in order to develop a comprehensive, effective crisis response and business resumption plan, including developing:

* An organization to develop, test, maintain and execute the plan.

* An assessment of the threats to continued operations.

* Plans for responding to a crisis and determining the appropriate parts of the business resumption plans to activate.

* Plans for restoring the operations of individual business units such as accounting, deposit operations, loan operations, trust and others.

* Plans for maintaining and testing disaster recovery plans.

Organizing to plan

A first step is to identify the bank personnel who will be responsible for preparing and maintaining crisis response and disaster recovery plans. These people are typically business unit managers most responsible for day-today operations. Their primary responsibilities are to identify the potential business disruption threats, determine the most critical operations within the bank, prepare the necessary plans to respond to a crisis-including mobilizing personnel-and maintain and test the plans. The person who will manage the effort will be called the contingency planning manager. For this position, you need to identify someone who commands enough respect within the bank to get the job done. While most banks designate the technology manager for this role, other managers can be just as effective.

A second group of managers should be designated to serve as the emergency management committee (EMG). These are typically the most senior managers, charged with evaluating the disaster and deciding which response is the most appropriate, given a particular disaster scenario. The EMC will be responsible for deciding what actions are most appropriate to take and when--and to what extent--to activate the disaster-recovery plan. For example, notifying the computer hot-site provider that the bank is declaring a disaster may result in a significant expense, even if three hours later the bank determines that operations can be maintained at the current location.

EMC members are also primarily responsible for media management and public relations during a disaster. A marketing professional should be involved in creating a media...