The development of sound and efficient business continuity plans within the financial sector is of common interest to central banks, financial sector supervisors, financial institutions and financial market infrastructure operators in many countries.
What is Business Continuity?
The purpose of a payment system’s business continuity arrangements is to seek to ensure that the agreed service levels are met even in the event that one or more components of the system fail.
To achieve this, all payment and settlement processes, that are managed and provided by the system operator, the main business processes should be identified and potential threats identified and assessed that could lead to interruption or delay in the provision of services. It is important to classify threats according to their severity and take appropriate measures to manage the risks.
Business continuity objectives should be clearly defined. And the well-defined business recovery plan should ensure restore and continuation of all critical functions of the payment system within the predetermined time during the same settlement day.
Why is business continuity of payment and securities settlement systems infrastructure of crucial importance?
Ensuring the continuity of the infrastructure of payment systems and securities settlement systems has a huge impact on the stability of the financial system and the country's economy.
In case the payment and securities systems operation fails or unable to complete daytime activities, serious disruptions will occur in the financial system and the economy. Without functioning of RTGS, settlement of securities transactions in a risk-free environment would be very difficult. CSD disruption can also disrupt operation of RTGS system as, in case of need, the CSD provide liquidity to the RTGS payments by pledging securities.
Therefore, it is important that these systems operate without any significant and long-term failures.
Actions of National Bank of Georgia
National Bank of Georgia has developed the Business Continuity Plan, which covers the critical services of the National Bank and related systems and aimed at preparing the NBG to deal with non-standard situations that could jeopardize the provision of critical services.
The Business Continuity Plan includes specific scenarios and procedures for dealing with unforeseen emergencies. This documentation includes, among other things, contingency plan to restore the functioning of the payment system. Key emphasis is placed on the possibility of restoring the system at the backup facility, located in alternative premises and offers the same performance, capacity and functionality as the primary site.
The National Bank of Georgia periodically carries out testing and updating of business continuity plan to avoid the risk of interruption, incomplete or incorrect management of business processes caused by internal and external threats. The NBG uses various material, technical and human resources and ensures constant availability of direct and alternative resources to ensure maximum continuity of the Bank's critical services. Also, the NBG organizes business continuity testing for system participants in different scenarios twice a year.