In this case, there are three areas covered – Program Initiation, Risk Analysis, and Incident Management. Stick to discussing those three areas and nothing else with in the national bank readings.
Here are some notes to help keep you on the right path for this and the other Assignments:
1) Stick to the specific material being covered. In the business world and in academia, it’s extremely important to fulfil any assignment – from a manager or a professor – by answering exactly what is being asked. That’s actually one thing I tell people I’ve coached for job interviews: answer the question that was asked.
2) In this case, there are three areas covered – Program Initiation, Risk Analysis, and Incident Management. Stick to discussing those three areas and nothing else.
3) You are being asked to apply what you’ve learned about those three areas to National Bank. Use the information in the business profile – including the names of the executives – to show how to apply the information. You don’t have to create the documentation or bring in other information. For example, the Steering Committee will approve a BCP Policy – don’t write up a Policy document. Just say they will create one.
4) Stay within the page limit. When you’ve read the material and discussed it in class, you will be able to demonstrate your knowledge within the page count. More is not always better.
5) Business Continuity is a cycle with certain major elements that have to be addressed. We are looking at the first three elements, but there are more steps to the planning cycle. Again, stay within the material that’s covered. Don’t jump ahead to other areas such as the BIA.
Program Initiation Phase
National Bank is committed to serving its employees, customers, suppliers, and stakeholders. The company is an integrated company that provides a range of financial services to small and medium-sized enterprises, consumers, and large corporations as well. For the National Bank to ensure effective availability of essential products and services, it must establish a business continuity planning policy in support of a comprehensive program for business continuity, tragedy prevention, and business recovery. The company should be resilient to any kinds of emerging threat in a way that it continues to operate even under conditions that may be because of an incident occurrence. Use of a professional framework will ensure that there are no loose ends in the program and that all sections are working cohesively (Pérignon, Deng, & Wang, 2008).
In order to initiate the program, a steering committee will be a requirement. One of the key persons in the National Bank is Louis Vachon. He is the president and Chief Executive officer of the National Bank. Vachon will be a key participant in the initiation phase because he understands the strengths and weaknesses of the company better and therefore he will guide the team leaders to initiation of a powerful program. The other important team member would be Jean Houde who is the chair of the National Bank. His presence in the committee would be important, as he will give all the support needed in the initiation of the program including vital information about the company’s mission and goals. Karen Leggett would also be an important member in the committee. She is the executive vice president in the marketing and corporate strategy of National Bank of Canada. She will provide the committee vital information regarding the market and competition that would be important in initiating the policy. William Bonnell is an executive vice president in the department of risk management. He will provide essential information about the risks National Bank is likely to face in order to come up with a comprehensive program (National Bank of Canada, 2013).
In program initiation, the management team undertakes analysis, which is necessary in business planning. There are key characteristics of the business continuity plan that must be adhered to by the committee. The plan should be action oriented with key activities clearly defined. The plan should have individuals whose roles and responsibilities are clearly set out to avoid conflict during the initiation phase. The program should be well maintained and reviewed before its implementation and mostly if it is an old plan. The plan should be accessible, indexed, and cross-referenced to avoid difficulties in implementation. The plan should be recently tested and audited, so that its basics meet compliance requirements by the National Bank. The output of this stage is that it identifies the risks and outlines how to solve them (Fraser, 2009).
Risk Management Phase
In the risk management phase, the main risks associated with the National Bank are discussed. One of the risks associated with the bank is the credit risk. Credit rates have a favorable or unfavorable impact on the annual net interest income and the economic value of equity and therefore, it is important for the community to focus on the risk while designing the plan. Another risk is the operational risk. The risk arises from investments in foreign operations denominated in currencies rather than the Canadian dollar and it should be measured by assessing the impact of currency fluctuations. The policy designed by the committee governs the risk and controls its occurrence. Regulatory risk is another high profile risk associated with the National Bank of Canada. It refers to the bank’s ongoing capacity to raise sufficient funds to finance proposed or actual business activities. The company also faces another major risk of marketing which deals with competition from other developed word class banks worldwide. The national bank of Canada may also be faced by the reputation risk where the company will have to work round the clock to ensure its reputation is maintained. Another risk is the environmental risk that is unavoidable by the company. A proper business continuity plan will however cover the company from all these risks.
A SWOT analysis is crucial to enable the company identify their market, competitors and what they have an upper hand at compared to their competitors. A strong market in a certain region will enable the company to increase its products in the region (Canada, 2014). The company’s weaknesses are relatively lack of scale when compared to the competitors’ for instance higher exposure to trading capital markets. Opportunities are in regards to the ability of the company to expand beyond its scope due to other identified potential markets and threats entails the likelihood of regulatory changes that are likely to affect the company (NFPA. 2013). By applying SWOT analysis, the committee will be able to come up with a chart that indicates the severity of the risks facing the company.
Risk Severity Chart
In the following chart, environmental risk is a very low risk, reputation risk is a minor, operational risk is moderate, regulatory and marketing are considered to be high risks, while credit risk is a catastrophic risk because it is the main area of operation of the National Bank of Canada.
Incident Management Phase
In the incident management phase, the bank routinely promotes a risk management culture through internal communications that advance a balanced model where business expansion initiatives are coupled with constant concern of risk management. The persons in charge in this phase are the audit and risk management committee of the board (ARMC) (DRI, 2012). The ARMC approves risk management policies and risk acceptance limits. In addition to ensuring that the appropriate resources, processes, and procedures are in place to properly and effectively manage risk on an ongoing basis, it examines and approves all significant aspects of risk assessment systems. The most important risks to focus on include the market risk, operational risk, credit risks, and the regulatory risk. In order to deal with such high profile risks, the committee will have to design a committed plan that covers all these risks and ways of curbing them in case the come along.
In conclusion, in order for the National Bank of Canada to be successful, there should be a framework to communicate a crisis and to coordinate the response, coordinating with other external agencies should also be put into consideration. The National Bank of Canada committee should take advantage of its dominant position in the market of Quebec region and increase its selling opportunity in that region. This will however, not match the scale of its competitors in the region hence the need for the bank to increase network of branches across the region and apply a strategy that fills the gap left by the competitors in terms of providing service. However, this should be approached with the consideration that the competitors have a mightier financial strength enough to dictate market prices therefore there should be readiness for the risk of been pushed out of the business in case they lower the prices to a level that National Bank cannot operate which may translate to a crisis.
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