Business Continuity Plan Design for CBA

Commonwealth Bank of Australia, one of Australia's biggest and most famous banks, offers basic and key services necessary for retail banking, business banking, and institutional banking. Some of the most popular economic sectors that CBA targets include millions of customers within the country branches and a strong online banking menu internationally. Since it is a financial organization, the information Technology Company is very dependent on it as it supports its essential functions like online banking, payments, etc. Since it is almost impossible to have a continuous and uninterrupted delivery of services in the banking sector, a break can occur due to various reasons such as natural calamities, IT-related threats, hacking, technical faults, etc., This often results in severe consequences like loss of losses, negative impact on reputation, and channelization of fines and penalties.

In the contemporary world of finance Operational Resilience as well as Business Continuity Management are crucial when it comes to End-clients’ confidence and being in compliance with the requirements of the authorities. The BCP for CBA presented here focuses on the ability of the bank to adequately respond to disruptive events while also managing their impacts. This report will assess possible threats to business operations at CBA, assess the implications of major disruptions, and provide recommendations on how to plan and respond and then recover from disruptions to maintain business continuity to deliver services (Botha, de & Nicastro, 2020, pp.1-59).

This BCP will assist CBA in maintaining a continuous operational capability since the risk management plan, the business impact analysis, the incident response plan, and the recovery plan will help to meet customer and even regulatory demands of the financial business.

Business Background

The CBA is among the four largest banks in this country and provides many services such as retail banking, wealth management, institutional business, and insurance. CBA was established in 1911 and is a publicly held company with more than millions of clients within Australia and other countries. Being a provider of digital banking services, CBA is highly dependent on its IT systems to provide safe and efficient Internet banking services, archiving data, and customer service (Mehera & Ordonez?Ponce, 2021, pp.69-99).

Industry Background

The banking industry of Australia is very competitive and it is very much controlled by the government; money lending institutions such as CBA always have pressures in handling issues on cyber security, data privacy, and company solvency. As a result, there are technological risks that banks face such as cyber risks, operational risks, and risks arising from technological breakdown. This paper argues that a strong BC plan is crucial to CBA to retain customer confidence and meet the legal requirements during disruptive events (Le, Nasir & Huynh, 2023,pp.146-157).

Part One: Business Risk Register

This part identifies five major risks that CBA faces and how these risks can affect its operations:

Cybersecurity Breach: Risk of external attack to gain access to the banking sensitive information.
IT System Failure: Interrupted site availability that may lead to halted online banking operations.
Natural Disaster (Floods): The vulnerability of branches, data centers, and system networks to floods.
Regulatory Breach: Non-compliance with legal and regulatory standards is likely to result in fines or revocation of business operation licenses.
Supplier Failure: Interference from third-party suppliers to service delivery of vital organs.

For each of the risks identified a likelihood, impact, and priority ranking is stated with recommendations on mitigation measures to be taken. This gives a guide on the common risks and ways in which they can be dealt with, to avoid negatively impacting a business (Campbell & Smith, 2022,pp.469-491).

Risk Name	Risk Description	Likelihood	Impact	Priority	Mitigation Measure
Cybersecurity Breach	Unauthorized access to customer banking information through a cyberattack.	High	High	Critical	Implement advanced security protocols such as encryption, multi-factor authentication, and regular penetration testing.
IT System Failure	A critical system failure causes online banking services to go offline, disrupting customer access to accounts.	Medium	High	High	Redundant IT systems, regular software updates, and backup data centers for system recovery.
Natural Disaster (Floods)	Floods impact data centers and branch operations, causing system outages and disruption of physical banking services.	Low	High	Medium	Relocate critical infrastructure away from flood-prone areas and implement disaster recovery protocols.
Regulatory Breach	Non-compliance with regulatory requirements resulting in fines and loss of license.	Low	High	High	Regular audits, compliance monitoring, and employee training on financial regulations.
Supplier Failure	Failure of third-party vendors (e.g., payment processing services) disrupts banking operations.	Medium	Medium	Medium	Maintain relationships with multiple vendors and create contingency contracts to ensure continuity.

Part Two: Business Impact Analysis

In this section, four critical business activities are identified, which CBA must keep operational to ensure the continuity of its services:

Online Banking Operations: Essential for consumers to open accounts and make payments.
Fraud Detection Systems: Very useful for surveillance of objectionable activities and to control fraud or cheating.
Branch Operations: Crucial for the physical contact services such as banking services.
Payment Processing: Very important especially for executing orders by customers or for buying from businesses.

The maximum allowable downtime for each activity, whether the activity depends on other services, the loss incurred if that activity is lost, and RTO (the time frame within which it must be restored) are also determined for each. This then provides insight into which activities require speedy returns to minimize losses (Isiksal & Joof, 2021,pp.402-418.).

Critical Business Activity	Description of the Activity	Maximum Downtime	Depends on External Services?	Impact of Loss	RTO (Critical Period)
Online Banking Operations	Providing digital banking services such as account access, payments, and transfers through CBA's online platforms.	2 hours	Yes (Payment gateway providers)	Financial losses, customer dissatisfaction, reputational damage.	1 hour
Fraud Detection Systems	Monitoring customer accounts for potential fraud or suspicious activities.	4 hours	No	Increased risk of fraud, regulatory non-compliance, financial losses.	2 hours
Branch Operations	In-branch customer services including deposits, withdrawals, and loan applications.	8 hours	No	Loss of customer access to funds, negative customer sentiment, potential legal ramifications.	4 hours
Payment Processing	Handling transactions, including credit card and merchant payments for customers and businesses.	12 hours	Yes (Payment service providers)	Financial losses, breach of SLAs with business clients, reputational damage.	6 hours

Part Three: Incident Response Plan

This part outlines response actions for four potential incidents:

Cyberattack on Banking Systems: A sample of short-term interventions include isolation of the affected networks and customer notification.
IT System Failure: This includes relaying backup servers and informing the end users.
Natural Disaster (Floods): The go-downs entail evacuating the affected place and power back, and setting up the other data centers.
Regulatory Breach: Especially, there should be immediate reporting to the regulators and the adoption of remedial actions.

Every incident contains risk resources, response authorities, priority services, and how the incident would affect CBA’s services. It helps to guarantee that all key situations are handled capably to minimize the loss of time and skepticism of customers (Rajaretnam, 2020,pp.1-17).

Incident Type	Actions Required	Resources Needed	Responsible	Systems/Services to Prioritize	Services Affected
Cyberattack on Banking Systems	Isolate compromised systems, activate incident response team, and notify customers of potential data breach.	IT security team, cyber response tools, legal team	CISO (Chief Information Security Officer)	Online banking operations, fraud detection systems	Online banking and customer data systems affected.
IT System Failure	Switch to backup servers, notify customers of outage, and restore critical banking operations.	Backup IT infrastructure, system recovery tools	CTO (Chief Technology Officer)	Online banking operations, payment processing	All digital banking services delayed or unavailable.
Natural Disaster (Floods)	Evacuate affected data centers, switch to backup facilities, and notify emergency services.	Backup data centers, emergency services	Operations Manager	Branch operations, online banking operations	Branch and some online services affected.
Regulatory Breach	Notify regulators, initiate compliance review, and implement corrective measures.	Legal team, compliance officers	Compliance Officer	All critical operations	Risk of fines and operational penalties.

Part Four: Recovery Plan

The recovery plan aims to explain the correct steps to take and the available mechanisms to restore vital other business functions as soon as possible after a disruption. For each business activity, the plan outlines:

Preventative/Recovery Actions: Measures that have been put in place to prevent such occurrences or measures that would be taken to reverse the wrong.
Resource Requirements: What will be required for recovery (like backup servers, IT personnel, etc.).
Recovery Time Objective (RTO): How fast the activity has to be resumed.
Responsibility: Who is in charge of it?

This part helps in creating a roadmap to reconstruct those functions that are most crucial to CBA’s operations such that disruption to its customers and the bank is kept to a minimum (Plan, 2020).

Critical Business Activity	Preventative/Recovery Actions	Resource Requirements	Recovery Time Objective (RTO)	Responsibility
Online Banking Operations	Implement redundant systems, regular backups, and cyber defense protocols.	Backup servers, IT staff, cybersecurity tools	1 hour	Head of IT Operations
Fraud Detection Systems	Set up automated fraud monitoring systems and alert mechanisms.	IT infrastructure, skilled fraud analysts	2 hours	Fraud Detection Manager
Branch Operations	Provide remote support and emergency access to customer accounts.	Alternative communication tools, customer service staff	4 hours	Branch Manager
Payment Processing	Use alternative payment processors, regularly test backup payment systems.	Backup payment processors, IT infrastructure	6 hours	Payment Processing Manager

Part Five: Reflection on BCP Readiness

Assessment

CBA should enhance its current risk assessment plans by using methods such as machine learning that in turn help to identify potential threats. Advanced methods are also capable of consuming and aggregating data in the form of structured and unstructured data and figuring out the looming risks in real time. This proactive approach improves the company’s disposition to assess for risks and new risks, such as cyber threats or system breakdown before they worsen to great losses. This means that through constant interaction between intelligent tools and risk assessments, CBA can enhance its enhanced dynamic and better-tuned risk management approach that is better suited to the ever-evolving technological and regulatory landscape.

Preparedness

With regards to disaster readiness, CBA ought to perform exercise drills, for all its employees, business associates, and at times customers. In these drills, a critical incident such as a hack attack, a system shutdown, or a disaster such as a flood, fire, or a powerful storm is staged to enable all players to rehearse how they will handle such events and avert or lessen their impact. Including customers in these exercises helps them also understand how some services may be affected and what they should do during disruption. Performance during mock exercises also gives information on the extent to which CBA’s people and structures are ready to handle actual case scenarios and exposes the strengths and the areas of inefficiency in the current structure relating to disasters (Merideth, Bandara & O'Neill, 2020).

Response

In the area of incident response, CBA should hire an experienced engineer to create an AI system that will control threat detection and response. The aforementioned system would be capable of rapidly identifying a cybersecurity threat, containing compromised systems, and responding quickly to eliminate the threat. This makes response time short and the impact that the incidence is likely to cause is minimal. An AI-based method also minimizes the dependence on handling, and leveraging, which enhances IT staff’s productivity and decreases the quantity of human mistakes in a calamity (Culpepper & Lee, 2021,pp.73-98).

Recovery

Thus, to improve the recovery times, CBA should consider subscribing to cloud-based disaster recovery. Since critical services are located in the cloud with fail-over capabilities, CBA can simply move off of a failed piece of hardware or a disaster such as a hurricane or even a cyber-attack. This reduces disruption time and facilitates business operations continuity and therefore CBA can be in a position to establish required procedures that can feed services important to clientele (Hughes & Brown, 2022,pp.1-13).

Conclusion

Commonwealth Bank of Australia (CBA) is in the midst of a moderating and intensely competitive environment, in which keeping a continuity of services is vital. This BCP has been useful to CBA in that it makes the Company prepared for disruptions that may arise from cyber security threats, acts of nature, or loss of IT systems. In this case, the bank categorizes priorities of the business activities to enable the identification and prioritization of any important business and fundamental processes such as online banking, payments, and fraud detection systems to be restored in the shortest time possible following a disaster.

In elaborating the incident response and recovery plans in this report, organizational downtime and cost losses are reduced to the barest minimum. Among others, the program of risk assessments based on machine learning, disaster drills, the use of AI for response to incidents, and cloud-based disaster recovery will affect positively the resilience of CBA.

References

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Campbell, A. and Smith, D.R., 2022. 'An empirical investigation of the quality of value?at?risk disclosure in Australia. Accounting & Finance', 62(1), pp.469-491.<https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12795>

Culpepper, P.D. and Lee, T., 2021. 'Media frames, partisan identification and the Australian banking scandal'. Australian Journal of Political Science, 56(1), pp.73-98.<https://www.tandfonline.com/doi/abs/10.1080/10361146.2021.1879009>

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Le, T.N.L., Nasir, M.A. and Huynh, T.L.D., 2023. 'Capital requirements and banks performance under Basel-III: A comparative analysis of Australian and British banks'. The Quarterly Review of Economics and Finance, 87, pp.146-157. <https://www.sciencedirect.com/science/article/abs/pii/S1062976920300740>

Mehera, A. and Ordonez?Ponce, E., 2021. 'Social and economic value creation by Bendigo Bank and Stockland Property Group: Application of shared value business model'. Business and Society Review, 126(1), pp.69-99.<https://onlinelibrary.wiley.com/doi/abs/10.1111/basr.12224>

Merideth, J.C., Bandara, W. and O'Neill, D., 2020. 'Process portfolio management for enhanced digital readiness: Insights from a large Australian bank'. In Proceedings of the 41st International Conference on Information Systems (ICIS 2020). Association for Information Systems.<https://eprints.qut.edu.au/205802/>

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Service and Operations Management in IT: Business continuity plan design

Table of Contents

Introduction