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Y2K Contingency Planning
Shortly before Christmas, the regulatory agencies issued guidance on contingency planning. If you haven't seen this or haven't worked on a contingency plan, it is time to get started.
Contingency planning differs from all of the work being done to prevent problems. Contingency planning is the bank's plan for responding to something actually going wrong. What goes wrong could be the bank's own efforts, the vendor's work, or something outside of the bank's control, such as not having electricity.
The first step in contingency planning is to admit that all of the hard work done on Y2K could in fact be somewhat flawed. The next step is to develop a plan. The agencies recommend taking several specific steps.
First, establish organizational planning guidelines that define your strategy. In setting your guidelines, decide who should be involved. While Y2K systems work involves the staff that knows and works with systems, your contingency planning should include staff that delivers services. For example, branch managers should be a part of your contingency planning. They will be most familiar with customer needs and expectations. They will also be most familiar with the physical plant problems that may occur if utilities fail.
Second, complete a business impact analysis. This is where you identify what could go wrong and what would be affected. You should focus on core business activities and services. Remembering that being able to open the branch and the vault are probably core business activities. Both electricity and security over-ride systems should be considered.
Third, have a business resumption plan. If something fails, how will you overcome the problem. You'll need to include plans for communications without phone service, functioning without electricity, and one or more systems going down.
Finally, validate your contingency plan. Make sure it will work.
Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 1, 2/98
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