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October 29, 2007

World Class Business Continuity Planning at Bankers Trust Company

Written by  Paul Kirvan
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Business continuity planning is a strategically important issue at Bankers Trust Company (BTCo), a multi-billion dollar global merchant bank headquartered in New York City. Bankers Trust has a highly decentralized business structure, with its main offices in the New York metropolitan area, London, Australia, and the Far East. And although business units operate autonomously, the company’s success has been the result of operational integration across business and technology boundaries.

As a major global financial organization dealing in multiple time zones and in numerous financial markets, Bankers Trust depends extensively on its information systems and communications. Today, most business areas have developed disaster recovery plans. The technology areas, who manage the data centers, local area networks, and telecommunications infrastructure, also have extensive disaster recovery plans. These plans have helped Bankers Trust survive numerous outages that would have been disastrous for other companies.

In the past, the company stressed disaster recovery for technology areas only; but the company wanted to go beyond its then current level of disaster recovery. Based on the realization that technology has to work jointly with business units, the commitment was made to go beyond existing disaster recovery plans and develop individual business continuity plans for each business and technology unit. That way, profit-making activities can be recovered, not just the systems and technology supporting them. This article describes how the bank developed these plans.

Why Bankers Trust Developed a Business Continuity Plan

Bankers Trust is a firm believer in the use of technology for competitive advantage. BTCo is also committed to maintaining its high standards of technology, despite the potential for disasters and other disruptive events.

As such, the Company began analyzing its future requirements for technology in the early 1980s. The results of that analysis showed that there was a focus on data processing operations, but not on disaster recovery issues. All of the data center facilities were located in single buildings in New York and London. In addition, a growing regulatory emphasis from the Federal Reserve Bank and the Treasury Department placed more pressure on financial institutions to provide recovery support.

BTCo realized that having data centers in New York and London wasn’t enough. And non-functional data centers certainly would not get us very far, from a competitive position. In 1985, we introduced a highly innovative document, the Bankwide Technical Architecture (BTA). The BTA defines the structural, operational and environmental components, as well as technical and operational standards, necessary for BTCo to use information systems and communications technology to its competitive advantage. Business and technology groups throughout the Company build information systems based on the BTA. Disaster recovery is a key part of the BTA.

During the 1980's a study was conducted which demonstrated the vulnerability of a single data center, which was located in New York City. As a result of that study, we built our second metropolitan data center in Jersey City, New Jersey.

More recently, the growing frequency of events, such as bomb scares in London, plus increased automation of business applications, have heightened awareness and added momentum to the issue of business recovery. Today, several groups within the company are actively involved in business recovery, including Technology Strategic Planning (TSP) and Corporate Risk and Insurance Services (CRIS).

A key part of the BTA is the Disaster Recovery Architecture, which recommends how business units should protect their associated applications from potential disasters. The goal of the architecture, from an application perspective, is to get to the point where disaster recovery is a "non-event," e.g., processing at a different location simply by throwing a switch. The Disaster Recovery Architecture deals with application recovery, while CRIS supports business issues. We now plan to rename the Architecture as the Business Continuity Architecture, to more accurately reflect our emphasis on disaster avoidance, as well as recovery.

The transition from disaster recovery planning to business continuity planning did not happen overnight. The Company began to address disaster avoidance as a way of further shielding its operations from disruptive events. Much was invested to strengthen BTCo’s data processing, telecom and building infrastructures, which today are models of proven reliability and survivability.

Another key issue was our increasing dependence on automation. In the past, if their data centers were disabled, companies could still conduct business manually. They had the people, the expertise, and had not yet become technologically dependent. Today that has all changed.

Things move much faster in business today, especially banking. After companies learn how to use automated procedures, they leverage these procedures for greater competitive advantage. Unfortunately, it is also difficult, if not impossible, to go back to manual processing. In today’s integrated processing environments, companies simply cannot survive without their data centers and automated capabilities. Bankers Trust is no different.

The Bank’s ways of doing business has also changed. As a global merchant bank, BTCo is linked to many different organizations and markets. We are highly dependent on timely information for our trading floors and other areas conducting business. We simply cannot "take the rest of the day off" if New York City or London suffers a major disaster. Indeed, BTCo no longer can afford to be out of the market for any sustained period of time.

Two examples of events that helped encourage us to expand our disaster recovery activities were the ConEd power outage in New York in August, 1990, and terrorist bombings in London in May, 1992. Our backup power systems helped sustain us during the ConEd outage, one of the most serious in recent years. In London, where the Company’s business continuity plans were first widely developed, recent incidents have raised the level of awareness for business continuity. A fairly recent event occurred early in 1992, when a bomb scare at London’s Liverpool Street train station forced an evacuation of the building that houses our London trading center.

Bankers Trust’s Efforts in Disaster Recovery

Bankers Trust continues to make significant investments in disaster recovery, disaster avoidance, and now, business continuity planning. We are committed to being a world-class competitor; we are also committed to safeguarding our position, no matter how serious the disaster. BTCo’s commitment to disaster avoidance and recovery is extensive. Our data center operations are highly survivable.

The three primary data centers in New York City, Jersey City and London back up each other; processing operations are also diversified so they can be supported at different sites. Global communications networks are highly diverse; multiple carriers, redundant processing components, and backup power supplies are all used. BTCo runs its own in-house backup sites, and we now have backup trading floor facilities in London and New York.

All systems, networks and company locations are highly secure. Some business units with very high uptime requirements already have pre-wired and pre-configured space so they can recover operations very rapidly. We are looking to extend that to other areas where appropriate, so as to significantly reduce recovery times.

Disaster recovery plans were in place throughout the company by the end of the 1980's. Business continuity plans were a natural extension of the massive work already completed. We develop plans on several levels: individual locations, business units in each location, and technology assets in each location.

Bankers Trust is moving toward the day when applications run 24 hours a day, 7 days a week. That means we must take a new look at our data center and telecom operations for disaster avoidance and recovery. We want to go beyond start-of-day recovery; our goal is recovery to the point of failure.

Business Continuity Plan Development

Bankers Trust has developed business continuity planning standards for both business units and company locations, which includes information systems and communications. Plans are thus developed on two levels: 1) the technological infrastructure that surrounds business units, and 2) the individual business units and how they interface with the infrastructure.

As part of business continuity plan development, and in keeping with our decentralized organization, regional disaster recovery coordinators are in place worldwide to help us coordinate business continuity and resumption activities. This benefits us by providing local support for the plans as well as an understanding of specific business and technology requirements. BTCo also established primary command centers in metropolitan New York, London and Sydney, Australia so that senior-level staff can provide centralized recovery management.

But with the company’s decentralized structure, smaller command centers will be needed for individual business lines to help coordinate their business continuity activities. As a result of this direction, we are focusing on the coordination between technology and business units. Prior to this work, most business continuity activities were based on assumptions and the expertise of a few key individuals.

By contrast, other groups with critical applications developed highly coordinated disaster plans with data center and telecom departments. We are now moving forward to have that same level of coordination throughout the company.

An updated set of standards will require a greater level of control and management. Today, sign-offs are required from technology infrastructure groups. New standards will require sign-offs from both technology and business areas. The new standards ensure that the business and technology assumptions developed for a business unit are acceptable to all associated parties. The two key issues will be 1) the technology organization can handle the business unit’s information requirements in a disaster, and 2) the resources needed to ensure recovery are in place and operational.

Cooperation across business and technology units has been key to the success of BTCo’s business continuity plans. Two organizations — TSP and CRIS — have been instrumental in making this happen. TSP handles the technology issues, while CRIS deals with the business perspective. Issuance of standards and policies, as well as fostering an environment for discussion have helped get people to talk about the critical issues and take action.

Both groups also coordinate tests of disaster recovery and business continuity plans, which further encourages cooperation. Another group, called Centralized Environmental Coordination (CEC), deals with environmental issues like power and air conditioning; its representatives include members of the data centers, telecom departments, TSP and building management.

Documenting and Testing the Business Continuity Plan

Although different business continuity plans are in place for each business line, certain elements, e.g., items to protect, power supplies, application criticality codes, are common to all. Both TSP and CRIS have specific standards for items to be included in disaster recovery and business continuity plans, respectively.

Although BTCo does not currently have a formal documentation standard, some areas use the DP/90 software product, and plans are in place to standardize the process. We would like to have a common, customized software package that everybody can use, but have not yet identified a product that meets all our needs.

Business continuity plan testing is a function of the business unit and its applications. Each business unit and its associated applications are assigned criticality codes. These codes identify elements of the bank with the greatest exposure. As such, their disaster recovery and business continuity plans are tested more frequently.

Tests are presently conducted "live." Before the test is conducted, time is invested determining the test objectives and setting up environmental parameters. The test, which is typically conducted over a weekend, is coordinated between business and technology units; representatives from each unit are present during the test. BTCo is currently expanding its testing procedures to include paper simulation tests. We’re trying this option as a way to conduct initial outage response tests with minimal advance notice. Depending on the results, we may incorporate this process into our standards.

The company’s internal audit department also attends disaster recovery and business continuity plan tests. Its input is used to help fine-tune plans for business lines and technology units alike.

Current Status and Future Plans

Bankers Trust is currently meeting disaster recovery and business continuity requirements from organizations like the Federal Reserve and bank clearing houses. Each internal business unit has disaster recovery and business continuity plans; most are tested on a regular basis. The technology infrastructure is solidly in place.

But even at this level, Bankers Trust wants to do more. We are currently in the midst of a major effort to re-examine our operational structure more closely, to "turn screws a little tighter," and take advantage of new technologies like fiber distributed data interface (FDDI), electronic vaulting, and remote shadowing.

An example of this is how we plan to integrate local area networks (LAN) into our infrastructure. As the technology is deployed, we plan to develop standards and include business continuity planning in the overall process to ensure that LANs are protected in a disaster. The company is moving toward a more integrated environment for business continuity plan testing. Our goal is to get to the point where every area in a building is tested simultaneously, rather than testing individual elements in isolation.

BTCo even has senior management steering groups for business continuity in key regions. These groups have raised the focus of business continuity to the senior vice president and managing director levels. Currently, steering groups are in place in London and New York, with others planned at our major locations worldwide.

Bankers Trust provides world-class banking service to its customers around the world. Our services are first-rate, but we want to be even better. We believe our customers deserve it, and we think that our business and our employees deserve it as well. If a disaster occurs anywhere in the world where BTCo is located, we want to make sure it won’t affect our business, and our customers.


Paul F. Kirvan is Vice President of The Kingswell Partnership, Inc., an international consulting firm.

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