This article first appeared in The Edge Malaysia Weekly on February 24, 2020 - March 1, 2020

BANK Negara Malaysia has approached financial institutions (FIs) operating in the country to check on their business continuity plans (BCPs).

“The ongoing uncertain environment has forced many businesses to look at their BCPs. The central bank wants to ensure that the BCPs of FIs will be ready to withstand any system shock. This includes information technology (IT) risks and readiness,” a finance executive tells The Edge.

Channel checks reveal that FIs are actively reviewing and testing their individual BCPs in light of the novel coronavirus (Covid-19) outbreak.

While every FI would have put in place its own BCP, MPI Generali Insurans Bhd CEO Krishnamoorthy Rao says the Covid-19 outbreak is a good test case for them to continue to review and enhance their capabilities to prepare for extreme situations.

“In enhancing our resilience, we have alternative working arrangements with greater flexibility to support our critical functions. This includes enabling technology and people capabilities to work from any safe and suitable location. With technology and communication advancements, we can address such threats with greater flexibility and effectiveness,” he explains.

He says MPI Generali has a detailed BCP that includes handling pandemic situations, detailing the actions required for different levels of severity.

“These include alternate sites and command centres to ensure our critical operations are sustained. Our BCP is reviewed regularly to ensure we are up to date, given evolving challenges as well as technology,” he adds.

Allianz Malaysia Bhd chief operations officer Sean Wang says the company recently shared with Bank Negara the precautionary measures it has put in place.

“In any given situation, Allianz Malaysia’s BCP documents procedures to be followed in response to a significant incident that may severely disrupt the company’s ability to operate normally. Under these procedures, we are able to analyse the impact on the organisation’s goals if critical processes and functions are disrupted and prioritise recovery and business continuity. Periodic testing of the BCP is also done to ensure the applicability of the plan to the best of our abilities,” he tells The Edge.

“The Covid-19 outbreak is new to all of us and caught the world by surprise. In the event that our BCP needs to be activated, then there is a call-out cascade to mobilise the essential personnel who are ready to act according to the response framework for timely action.”

Thor Boon Lee, country chief risk officer of OCBC Bank (Malaysia) Bhd, says the banking group has begun to heighten its preparedness for any situation that may arise in the current environment.

“Our team continues to work on a daily basis to ensure the safety and well-being of staff and those entering our premises by putting in place precautionary measures to ensure there is no disruption to our services that might inconvenience customers. Toward this end, we have established a Covid-19 pandemic task force,” he says.

Thor adds that robust preparedness over the years has given the banking group the opportunity to now put into “practice what has hitherto been largely a solid framework that has remained theoretical for the most part”.

“Yes, this allows us to place our BCP mechanisms under intense testing rigour so that we are able to fine-tune our efforts if necessary. There are no significant gaps encountered thus far, thanks to the solid collaboration from everyone within the organisation who has worked hard to look at the specifics related to the situation at hand. We are also constantly exchanging ideas with our counterparts at the group level in Singapore in order to derive the most from each other,” he says.

A CEO of an insurance company, who declined to be named, concurs, saying that Covid-19 has put the spotlight on BCP readiness.

“While all insurance companies have BCPs, the Covid-19 outbreak puts them to test from a practical standpoint, and if there are any gaps in a company’s BCP, what it should do to plug them. Everyone is actively looking into their BCPs now,” he says.

Covid-19 puts into focus existing BCPs’ effectiveness

There are practical questions businesses have to look at amid the uncertainty fuelled by Covid-19, says a director of an investment firm.

“For example, with working offsite more of a reality now given the travel restrictions and quarantine rules some companies have enforced, it is imperative that IT systems are up to date, secure and safe. In addition, should a big group of staff have to work offsite, companies, such as some insurers, will need to look into data access offsite as only limited staff are allowed to access servers on site remotely through virtual private networks,” the director adds.

Covid-19 has also put into focus whether existing BCPs are really effective, says a head of investment.

“All banks have one traditional BCP, which envisages people just moving to another physical location, not working remotely. With working from home more of a reality today, BCPs need to be up to speed. For example, in a standard BCP, bankers have to work at an alternate physical site together as a team. However, with Covid-19, let’s say a whole team needs to be quarantined at individual homes and is not able to work at an alternate physical site ... then what happens? So this shows up the gaps and helps companies prepare for a fluid situation such as the one we are in today,” he says.

The chief operating officer of a bank in Malaysia points out that banks have robust BCPs in place and they “test the readiness of it every year — whether or not there is Covid-19”.

He says foreign and local banks recently held a teleconference to share information and discuss the Covid-19 situation as well as what each is doing with regard to their BCPs.

While BCPs may not be new to banks, Covid-19 is unprecedented reality today that has forced businesses to think through the impact of the virus on their business continuity, which may include arrangements for employees to telecommute, work from home or split sites and work in shifts.

In Singapore, 300 DBS Bank employees had to vacate their offices at Marina Bay Financial Centre after an employee was confirmed to be infected with Covid-19.

The bank had to activate its BCP, with employees working from home or from split sites to ensure minimal disruption to operations.

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