SOM Study Shows Financial Institutions Not Fully Prepared for Terrorist Attacks
Posted: August 12, 2004 at 1:00 am, Last Updated: November 30, -0001 at 12:00 am
Financial institutions could be better prepared for the consequences of a major terrorist attack, according to a study conducted by faculty members of George Mason’s School of Management and commissioned by AT&T.
“Business Continuity in Financial Services: Perceptions of Senior Management,” written by Professors Amitava Dutta, Mahesh P. Joshi, and Linda Parsons, reveals most financial and other institutions that rely heavily on digital information would be unable during a terrorist attack to maintain business continuity preparedness (BCP), which is the ability to maintain and continue operation during a crisis with minimal impact on services.
Through interviews with senior executives on both the information technology and business side of the financial services industry, the researchers found that most chief executives and operations officers believe only one-half to one-third of their normal business would be operating after an interruption. BCP during a crisis would not only ensure a company’s survival, but would also offer peace of mind to investors and customers.
While there is no question BCP is an important part of the solution, the study indicates complete preparedness requires partnering with outside external institutions to protect crucial hardware and software.
“The study shows that senior managers in the financial services sector especially are increasingly seeking and developing BCP plans and enlisting the support of nonfinancial institutions to implement them,” says Dutta. These external service providers offer a variety of expertise and resources, from redundant hardware supplies to multiple data centers.
As an example, AT&T has network disaster recovery teams and other resources that have been deployed throughout the country in the past 10 years to assist in natural and civil emergencies, including earthquakes, blackouts, and 9/11.