A critical evaluation of Business Continuity Management (BCM) in UK financial organisations

Wong, WNZ

Abstract

Major events in recent years have provided evidence that the world of business is rife with risks and
uncertainties. The vivid events of 9/11 (11 th September 2001) in New York, U.S. and other major
incidents, have forever changed the global perspective of managing threats to business operations.
The U.K. financial sector, being the largest contributor to the national economy, needs to have robust
contingency arrangements to counter any major operational disruption. As such, this doctoral research
identified the premise of the need to raise the status of BCM in financial organisations. Two key research
contributions were devised based on such a premise:
1. Assessing the business continuity readiness of FSA-regulated organisations by critically reviewing
their business continuity arrangements and processes based on the theoretical standards of BCM
Good Practice Guidance developed by the Business Continuity Institute (BCI);
2. Further improvement to the current state of BCM in U.K. financial organisations by proposing new
measures based on the integration of BCM theories (from literature) and good practices (from case
studies), in this case, a newly defined BCM definition and concepts with strategic importance, and
the BCM PARAGON, were developed to underpin their operational resilience.
The research critically reviewed the current BCM issues, proposals, and work raised and carried out by
the U.K. financial authorities: HM Treasury, the Bank of England and the Financial Services Authority
(FSA). Weaknesses were identified in the FSA's review of its regulated firms' business continuity
arrangements. The research then examined the existing BCM approaches developed by U.K.
government/regulatory and professional bodies. In particular, the BCM Good Practice Guidance devised
by the Business Continuity Institute (BCI) was comprehensively reviewed. The BCM Good Practice
Guidance was adopted and modified to assess the levels of readiness of participating financial
organisations in this research. This was in response to the inadequacies of the FSA's research in
understanding BCM processes of major financial groups, which had prompted a more structured and
progressive approach to understanding the business continuity arrangements of financial organisations.
Based on a critical evaluation of existing BCM definitions from various government/regulatory bodies
and financial organisations, a strategic BCM definition and concepts (based on risk management, crisis
management, disaster recovery, and contingency planning) with strategic importance for the U.K.
financial sector were proposed.
The research consisted of four detailed case studies of U.K. financial organisations' business continuity
arrangements. The results revealed that Case 1 was a crisis and disaster-prepared organisation due to
its previous experience in disasters, Cases 2 and 3 were partially prepared while Case 4 was considered
as the unprepared case. In all cases, the element of strategic management was overlooked.
From a critical evaluation of all available literature and data, a finance-based BCM PARAGON
framework was developed. The framework comprised three dimensions: strategy, process, and
performance, which were evaluated by the participating organisations. The organisations confirmed that
the PARAGON, which was developed from theory and practice, was applicable in their existing BCM
programmes and it fostered improvement and innovation. Nevertheless, for the proposed BCM
PARAGON to be more "use-friendly" and readily applied into financial organisations, it needed to be
simplified and revised to incorporate practical comments of the participating managers. In addition, the
business continuity managers recommended that the proposed PARAGON should be integrated into the
senior management's high-level policy and strategic management.

Citation

Wong, W. A critical evaluation of Business Continuity Management (BCM) in UK financial organisations. (Thesis). University of Salford

• Thesis Type: Thesis
• Deposit Date: Aug 19, 2021
• Award Date: Jan 1, 2007