back to article Banks told: Look, your systems WILL fail. What is your backup plan?

Banks were today told to assume there will be problems with systems and to work on their backup plans following a series of failures caused by increasing reliance on technology. In a joint paper, the UK's Financial Conduct Authority and the Bank of England's Prudential Regulation Authority said that operational resilience …

Anonymous Coward

Having backup plans is good.

Recovery plans are better,

Testing is beneficial,

Honesty is essential.

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Re: Having backup plans is good.

Management listening to their SMEs regarding what are best practices is essential.

The problem is usually cutting corners to meet ridiculous arbitrary project deadlines.

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"Honesty is essential"

What happens then if the vast majority of your staff (who you've outsourced to) have a culture where it's expected for you to lie because the boss is always right?

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Anonymous Coward

Re: Honesty is essential

Really?

They will lie throygh their back teeth simply because the BOD level people don't have a clue.

All their IT operations could have been sent to India along with the Systems themselves for all they care. As long as the bottom line improves why should they care? They'll be off to pastures new long before the shit hits the fan.

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Re: Having backup plans is good.

No MBAs .....

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Re: Having backup plans is good.

backups are good, fault tolerance and resiliency is also good. Backups should be an utter last resort as it almost certainly means stuff is lost between fail and restore. At least with multiple resilience you can carry on trucking.

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Re: Having backup plans is good.

Testing is beneficial, Honesty is essential.

Question from (TSB) Management: Have we tested this new application?

Response: Yes.

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Re: Having backup plans is good.

<quote>The problem is usually cutting corners to meet ridiculous arbitrary project deadlines the demands for an increased bonus pool.</quote>

FTFY!

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Anonymous Coward

The Bank 'crisis' plan we really need but will never see

Bonus Clawback

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Childcatcher

Re: The Bank 'crisis' plan we really need but will never see

"What is your back up plan?"

Eject!

followed by

Deploy Golden Parachute.

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Anonymous Coward

Re: The Bank 'crisis' plan we really need but will never see

Deploy Golden Parachute.

There are times when equipping one of these people with a genuine golden parachute could be interesting. Especially when viewed from a drone at, say 5000ft

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Re: Nice

Simples. Outsource then blame somebody else.

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Re: Nice

You can't outsource the problem, only the fun of fixing it.

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"our contract guaranteed 7 9s uptime"

"That's nice. Is it helping restore the service?"

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"there are big penalty clauses if they don't deliver"

"That's nice. Is it helping restore the service?"

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"This is listed as no 1 priority system"

"That's nice. But is it *their* no 1 priority?"

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Re: Nice

don't worry. its in the cloud. That fixes *everything*

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I wonder if the banks will absorb the extra costs and give lower bonuses to the execs or look at stopping free banking for the general public.

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stopping free banking for the general public.

Which part of the planet do you live where the general public gets 'free banking'?

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Anonymous Coward

Which part of the planet do you live where the general public gets 'free banking'?

UK... I don't pay any fees for banking.

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Well you do - they are just hidden from plain sight.

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Boffin

”UK... I don't pay any fees for banking.”

True , you don’t pay any fees.

You simply pay all your money into your account every month and the bank leverages that positive treasury position on the money you’ve lent them to play the stock marke until you need it back, at which point they give you back only what you need without any recompense for the loan you’ve made to them.

“Free”. Dream on. It’s like the “free” iPhone you get on a £50/month mobile contract.

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re “Free”. Dream on.

- True but...

It means I don't have any income to pay tax on, which in turn keeps my tax affairs so simple I don't have to make a tax return, which is worth a fair few quid to me. If I was paying charges and getting interest life would be more complicated. I don't need complication.

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Thumb Up

The free lunch

No dreaming necessary. By any rational definition, my UK banking is free in terms of monetary cost, in terms of the net positive benefit to the consumer, and in terms of no opportunity cost to the consumer. (Anyone paying £50 a month for their iPhone is parting with cash for a service which includes an iPhone - the payment is the clue.)

I part with nothing and concede nothing but gain the tangible benefit of access to all the banking services I need - laughing all the way to the (free) bank.

For example, current account services obtained: standing orders, direct debits, ad hoc personal payments, debit card and card payments, ATM services, free domestic inter-bank transfers, Internet account management facilities, mobile as well but I won't use it, fraud management and alerts, balance and deposit/withdrawal alerts, and a range of other account management options.

Current account cost to me: Zero, including a total lack of fees and zero opportunity cost to me of not investing the residual money moving through the account (all my residual income goes to separate investment services which I pay for, and investing the transient cash balance is a laughable idea for the individual). There is no requirement to maintain a minimum balance (although I deliberately move enough volume through to get some extra benefits).

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Re: re “Free”. Dream on.

you mean that single box on a tax return that you type in from the email you get annually? It usually takes me an extra 15 seconds. It takes me longer to remember is it 9/10 or 8/10 of my ATL I can claim.

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Re: re “Free”. Dream on.

You miss the point Danny. In the UK, if my tax affairs are reasonably simple, I don't have to fill in a tax return at all. No form, no email, no nothing. Just a letter telling me what my tax code will be for the next year that I don't have to do anything with because my employer gets told as well.

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To paraphrase a common saying

"Cash, Motherfucker[1], do you use it?"

and untested backups are worse than no backups - as they give you a false sense of security.

[1] apart from the expletive: is this to be capitalised or is it a common word?

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Re: To paraphrase a common saying

"Cash, Motherfucker[1], do you use it?"

Johnny or Pat?

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Re: To paraphrase a common saying

TBH in the age of VMs, it is totally inexcusable to leave a backup plan untested. You can even spool up a cheapy nas iscsi box to use as testing storage if you need to (all isolated of course).

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Week-long?

The best known failure of late is of course TSB and its week-long meltdown and subsequent PR crisis

There were problems that there should have been two months later.

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Re: Week-long?

I'm surprised two people managed to parse that gibberish and understand its intended meaning enough to upvote it.

(There were problems that shouldn't have been there two months later.)

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Re: Week-long?

TSB online is still partially broken today.

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Wrong Question!!

Asking "What is your back up plan?" is the wrong question!! The correct question is "How quickly can you repair, recover, restore*?"

Back up is not the solution, Back up is one method to provide the solution.

*Repair damaged hardware, Recover lost data, Restore functionality

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Boffin

Re: Wrong Question!!

The question is:

“What are your plans to continue in business when X, Y, Z or other things occur?”

There is no single answer.

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Re: Wrong Question!!

Asking "What is your back up plan?" is the wrong question!

I think they're using the term in a different sense than you're interpreting it. "What's your fall-back plan?" would have been less ambiguous. There needs to be a means of carrying on business whilst all the restoration, repair etc. is being undertaken.

The embarrassing thing for the banks is that it might involve customers visiting their local branch. Local? What local branch?

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Re: Wrong Question!!

I would say that the proper question is, "When is the last time you did a DR exercise, what were its parameters, and what were the results?"

"No plan survives contact with the enemy" (Napoleon) That is, plans are mostly worthless until they have been executed, preferably more than once.

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Re: Wrong Question!!

Asking "What is your back up plan?" is the wrong question!! The correct question is "How quickly can you repair, recover, restore, how often do you test it, and when was the last time you tested *?"

FTFY. Plans are meaningless as are "assurances" that corrective measures on paper will work. They need testing and updating.

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Re: Wrong Question!!

And as they say, no test or simulation is a proper substitute for the real thing. No emergency plan can be tested without an actual emergency. And as for a plan, it should be planS (plural) able to cover one another in case Murphy syrikes and a backup plan fails and you have to go to the backup backup plan.

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Re: Wrong Question!!

"Murphy syrikes"

Yup ;)

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That is not what should be regulated

I do not see that it should be a regulatory issue that banks have proper procedures and backups in place. If they don't, they pay the costs and if they pay too much, they end up dying.

Sure, there will be a bit of a mess, but in the worst case customers will take their government-guaranteed money elsewhere and that will be that. To Big To Fail is overrated.

What I would like to see is subprimes completely forbidden and no way to recreate them. What I would like to see is a bank that manages my money honestly and doesn't try every single dirty trick to make more money at all costs.

But hey, I'd also like to win the lottery. I know where my chances are better.

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Re: That is not what should be regulated

If they don't, they pay the costs and if they pay too much, they end up dying.

Sure, there will be a bit of a mess, but in the worst case customers will take their government-guaranteed money elsewhere and that will be that.

You seem to be ignoring just how unpleasant that mess can be for customers. In that period between "Oops clicked the wrong thing" and the Government paying out you've got missed mortgage payments (or missed rent payments), missed bills, potentially an inability to feed yourself or put fuel in the car to get to work.

All because some profit chasing fucker cut corners.

These measures aren't there to protect the banks, they're there to help protect the banks users.

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FAIL

Re: That is not what should be regulated

@Pascal Monett there will be a bit of a mess

Do you actually understand the fundamental connectedness of everything?

More than half of the payroll in the UK starts or ends in an RBS group account. Yeah, just let them fail. Doesn’t matter that half the country doesn’t get paid this month, they don’t need to pay for food, energy, shelter, they can take their government refunded money elsewhere when it’s all fixed six months later

Northern Rock was considered “too big to fail” due to the direct impact to the day to day operations of society in the UK, and they had less than 5% of the market.

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Re: That is not what should be regulated

"but in the worst case customers will take their government-guaranteed money elsewhere and that will be that."

That's the problem from the government's point of view. The money comes from government (well, from all of us really but that's rarely a consideration for government, especially the Treasury which considers it really owns all the money anyway). It isn't the bank's worst case, or the customers' worst case they're worried about, it's their worst case. If a bank fails its the government that's at risk and it wants to minimise that risk. That's why they want to regulate.

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Back up plan? What planet are they on?

In the old days it took tens of thousands of well trained clerks occupying endless rows of desks to run a handful of simple account types. Now banks have hundreds of flavours of their "product" the reality is I.T. IS their business - without it they don't have a business - and yet still, management consider I.T. to be a "cost" to be slashed away at - even though the business could not possibly function without it. It also shows just how out of touch the regulatory bodies are to suggest modern banking could switch over to manual! There is no plan B - rapid recovery of the service is the only feasible course of action and is where the focus should remain.

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Re: Back up plan? What planet are they on?

In the old days it took tens of thousands of well trained clerks occupying endless rows of desks to run a handful of simple account types. Now banks have hundreds of flavours of their "product" the reality is I.T. IS their business - without it they don't have a business - and yet still, management consider I.T. to be a "cost" to be slashed away at

They probably thought the tens of thousands of clerks were a cost to be cut.

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Re: Back up plan? What planet are they on?

"They probably thought the tens of thousands of clerks were a cost to be cut."

Yes, they did. That's why they took up the telegraph, phones, carbon paper, typewriters, photocopiers and every other technological innovation as soon as it became cost effective.

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Re: Back up plan? What planet are they on?

"It also shows just how out of touch the regulatory bodies are to suggest modern banking could switch over to manual! There is no plan B - rapid recovery of the service is the only feasible course of action and is where the focus should remain."

It's not necessarily so simple.

What the TSB incident shows - or at least what we're told - is that the core systems were OK but that it was the surrounding access layers were the problem and that that affected online, telephone and the branch systems. If the were various access routes (from the customer perspective) didn't depend on a common access layer the system would have been more resilient in that if the online access failed telephone service would have been possible and if ATMs didn't work cash could be obtained over the counter.

If a bank's customers are left effectively destitute "it's too complicated" isn't an acceptable answer.

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The importance of being earnest!

Drat and double drat. You've gone and dun' it! The responsibility to all of us, for a functioning system of profitable endeavour is a privilege and necessary. However In bygone times, failure was acceptable, but the standard has now been raised for a multitude of reasons 365/24/7, welcome. #arisingtideliftsallboats #whatwereyouthinking

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Re: The importance of being earnest!

#oscillationsolvesilliquidity #raise

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Re: The importance of being earnest!

Hashtags! Is that you, Amber?

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I could do with a list of banks that actually consider IT important enough to keep in house

Frankly any bank that doesn't consider the IT to be "core business" should go back to storing bags of gold in fortified vaults.

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Re: I could do with a list of banks that actually consider IT important enough to keep in house

Here it is:

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MEGA Mania ....... for MetaDataBase Battlers

Frankly any bank that doesn't consider the IT to be "core business" should go back to storing bags of gold in fortified vaults. ..... LateAgain

Nowadays, more than was ever the case before, is Banking's core business the command and control of media hosted narratives and especially those ones which effectively attack and expose their precarious situation and unsustainable fiat currency supply to failing intellectually bankrupt systems modus operandi as a simply complex means to an end which was the somewhat perverse and subversive exclusive maintenance and retention of elite executive global control in the hands, hearts and minds of their chosen few. A few who are no longer able or enabled to do that bidding without creating new chiefs/millionaires/billionaires with the necessary new skills to save their base performance platform.

And that is really conveniently easy with the simple quick transfer of banked wealth into an appropriate account which a principal can exercise to demonstrate the lost expertise which has their systems collapsing in the face of austere questions being asked of their dire performance compounding the inability to spread wealth around everybody. ...... you know, Make Everything Great Again

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