-Ravi Dhungel, Nepal Bank Limited
Every business in any sector of an economy always aims for uninterrupted customer service and sustained operation. But it is unlikely to happen all the time as desired. It is due to the situation business has to face due to any form of disruption or crisis. Such disruption could in the form of non-disasters, disasters, and catastrophes. Such an unpleasant emergency situation is caused by different factors including natural, human, economic, social, and health reasons. All these have challenged the business continuity making the outcome of such disruption more severe, complex, and prolonged all at the same time.
Business continuity is a concept and culture of making the business run even at the time of disaster or disruption. It is making the core business elements viable for customers with no interruption in service rendered to them. It is primarily the concept to set up back up strategies to be implemented at a hard time of disaster or pandemic. It can also be regarded as a disaster management framework with risk impact assessment in different functions through Business Impact Analysis (BIA). The comprehensive and integrated form of the Disaster Response Plan(DRP) and Business Impact Analysis (BIA) is the Business Continuity Plan (BCP). Hence, BCP is a backup strategy to tackle any form of disruption ensuring uninterrupted customer service by utilizing key core business elements, prepared after proactively analyzing the potential impact on the system, function, process, and resources of the business.
BCP is a globally accepted business management concept. But its preparation and practice are not significant as compared to its need for acceptance. The practice status is sound in businesses of advanced economies. The culture of BCP practice is not a highly focused business management area for businesses in emerging economies. That’s why the impact of any disrupting disaster or pandemic is more serious and pitiful in such emerging economies. Nepal, being a part of such an emerging economy, also has all these fairly disappointing status in BCP culture and practice as a part of business management. Fortunately, Nepal does not have to cope with a natural, human, and economic disasters regularly with ultimately intense impacts. This has never alarmed understanding the importance of BCP for any form of business continuation. Due to this BCP has always been of least priority by Nepalese businesses. However, its need has been highly felt and understood with the running pandemic of COVID-19. With this pandemic, Nepalese businesses have started looking for BCP to uninterruptedly run their business without disturbing customer service channels including the banks of Nepal.
Why BCP for Nepalese Banks?
Banks are running blood for any economy. The role of banks regarding money mobilization, credit creation, lending facilitation, capital formation, and economic digitalization is significant. Without these roles being performed by banks, there will no economic growth, development, and prosperity in any country. Banks are active partners for businesses and industries. Similarly, they are supporting hands for individual financial planning and monetary affairs. Today’s individual, industrial and economic survival is impossible without banks. Banks are that part of the economy whose interruption means no mobility of the economy as a whole. Being that crucial to any economy, interrupted banking services cannot be imagined at the time of disruption or disaster. Interruption of banking services at the time of such a crisis means extreme vulnerability of economic affairs and individual livelihood. Hence, considering such a cruciality of banks, Business Continuity Plan (BCP) has become the most for banks operating under any type of economy.
Nepalese banks also have a key role in deposit mobilization, credit, and capital formation, providing major to minor banking services and economic growth. They are so intimately linked with the economy that a slight interruption in any form in the banking system can bring a larger economic downfall. Nepalese banks are at higher risk of IT and cyber crimes which has been proven by different hacking and other software harming incidences at different times. Similarly, depending upon topographic location, many bank branches are exposed to natural disasters like floods, landslides, earthquakes, etc. Likewise, a recent ongoing pandemic of COVID-19 has exposed the vulnerability of Nepalese banks in terms of survival, operation, and customer services. Besides this, we cannot remain to assure of any human attack, war, any form of national emergency, a catastrophic natural disaster of any form, etc. in the future. Hence, Nepalese banks need proper BCP planned and implemented to tackle existing as well as future uncertain, unexpected, and unpleasant disrupting incidences.
BCP Practice in Nepalese Banks and Future Sight
Business Continuity Plan (BCP) is a greatly realized concept with not a high implementation status in Nepalese banks. Banks do understand their vitality in the national economic periphery and their flourishing deep-rooted need in the day-to-day normal life of their customers. Despite this, their focus and readiness with the backup operation strategy in the form of BCP are very low. This can be evident by the fact that very few Nepalese banks submitted their BCP to Nepal Rastra Bank when recently asked by the central bank. Some of these plans, primarily focused on providing banking services in the persisted COVID era, were excellently crafted and drafted. Most banks are still lacking behind and could not come along with their business continuity plan to foster uninterrupted banking services at current and future crisis time.
The recent COVID-19 crisis with lockdown and prohibitory order situation has urged Nepalese banks to opt for BCP making it realized as the needed culture, component, and practice of the Nepalese banking system. Before this, there was very little accepted, spoken, and initiated regarding business continuity at emergency and disruption time. Previously, Nepalese banks were highly focused only on profit grabbing with business expansion. Nepalese banks were of the sick mentality of “It won’t happen”, “We will see when it happens”, “No investment for unpredictable and uncertainties”, “Business rather than business continuation” etc. But slowly and surely such attitudes of banks, especially at the top management level, are changing with the existing COVID constraints.
Business Continuity Plan (BCP) was believed to be a cost and resource burden in the banking sector of Nepal. But now Nepalese banks have understood that it is the only way of ensuring key customer service, the safety of resources, safeguarding assets, and revenue generation at crunch hard times of disaster or pandemic. Hence, the culture of BCP policy formation at top management, forming a business continuity management team, business impact analysis on resources, actually writing the pan, and enacting it has started in Nepalese banks. The focus, intensity, and urgency level of which is still not at an overwhelmingly high level. But the culture and practice of BCP in Nepalese banks have started which is commendable. This has to persist longer for future harm minimization for the national economy, banks themselves, and godly banking customers.
Speaking of future sight of BCP practice in Nepalese banks, it has to be furbished on key three pillars. Firstly, it should facilitate good user experience either operating physically or going through digital platforms. Secondly, it has to be on the lower side of the business operation. The BCP being initiated has to be under within the affordable and effective cost structure of such banks. Thirdly, banks must identify an alternative source of revenue generation utilizing existing resources. This could be in the form of close customer products and services through digital or non-digital platforms. Moreover, BCP can be more futuristic if banks are more directed towards more digitalization and the use of artificial intelligence (AI). Existing customer queries and information through multiple digital platforms like customer calls, e-mail, customer chat through communication applications, etc. have to be effective enough to provide the same level of response with the same contents. All these can be linked to one comprehensive integrated digital system for purely consistent customer experience. Furthermore, Use of AI through Watson Assistant Chatbot and Smart Agents must be incorporated as part of the future business continuity plan of Nepalese banks.
Business continuity is the desired and demanded continued operation of a business at the time of emergency, disaster, and pandemic. It is overcoming challenges during disruption mentally and effortfully. It is responding to the crisis with cost cut and ensures effective service to the customers. Such initiation and endeavor are reflected through a Business Continuity Plan )BCP). BCP is the creation of strategy identifying all the threats and risks ensuring personnel and assets are protected at the time of disaster. A business can maintain its essential functions during and after a disaster has occurred. It is an emergency response plan to any disruption ensuring minimum loss with resumed normal operation through key functions, resources, system, and process of the business. Due to this, it is regarded as a key part of the modern business management framework including the banking sector.
There has not been the great practice of BCP in Nepalese businesses comprising of banks. Nepalese banks have no great focus on BCP before the COVID-19 crisis. Despite understanding their crucial role in the economic development of Nepal, they were not BCP centric. The reasons behind this were management’s mentality, modern technological accessibility, resource availability, and financial ability of the banks. BCP practice was there. But at very small or zero levels. However, with the arrival of the COVID era, banks have shifted their focus towards BCP conceptually, partially or few of them even at the full-fledged level. This initiation is the beginning of a new tale of preparing and planning uninterrupted normal operation and customer service at the time of future disruptions of any intensity or impact.
Although the Business Continuity Plan (BCP) has been initiated, the new culture in practice has not been clear, specific, and future-oriented. Identification of potential risks, their impact, resources being impacted, needed resources to tackle the crisis, recognizing core functions of operation, key system and process to be utilized during an emergency has not yet been truly done with expert quality. Similarly, the formation of the right business continuity team (headed by IT and other key functional members), conduction of comprehensive business impact analysis, contingency emergency planning, use of crisis management tools, the actual writing of BCP has not been salient so far. But it is being initiated and improving which is good for the overall Nepalese banking sector. Similarly, upcoming BCPs of banks must come with a high priority on digitalization and artificial intelligence (AI) based operation and customer service. More specifically, the status of BCP in Nepalese banks is an infant currently seeking better future sight through process availability and system reliability within their ability to ensure uninterrupted banking services even at future disruption along with the current COVID-19 crisis.