Natural disasters don’t wait for a convenient year. Hurricanes, floods, winter storms, wildfires: financial institutions already know how fast the unexpected can arrive. If a disaster took your systems down tomorrow, how long would it take to get your institution running again? Would the resources be in place to restore critical systems quickly and efficiently?
Community banks and credit unions lean on their business continuity plan (BCP) to guide them through the strategies and protocols that minimize downtime and keep operations running. But a crisis calls for a comprehensive disaster recovery (DR) plan just as much.
A natural question follows: if the BCP is already solid, why does an institution need a DR plan too? Business continuity planning covers the strategies and protocols that let a financial institution keep operating during and immediately after a disaster. The BCP has become the blueprint for guiding an institution through recovering from a business interruption, outlining what has to happen to keep key products and services reaching customers when disaster hits.
Disaster recovery is narrower and more technical: the ability to restore critical data and applications so the institution can operate normally again. The DR plan spells out exactly what needs to happen immediately after a disaster to begin that recovery.
In practice, a BCP lays out what it takes to keep key products and services available to customers and members, while a DR plan lays out the specific steps to recover the technology those products and services depend on. Both are necessary, and they work together by design. The DR plan is really one part of the larger BCP.
The two are structured differently too. A BCP is built from a business impact analysis, a risk assessment, and an overall continuity strategy. A DR plan is built from evaluating every backup and confirming that any redundant equipment essential to recovery is current and working. They work together, but they’re two distinct disciplines.
- BCP: A plan to continue business operations.
- DR: A plan for accessing required technology and infrastructure after a disaster.
Once both plans are complete, testing is what proves they actually work: verifying effectiveness, training staff on what to do in the moment, and surfacing where the plans need improvement. The two are different enough that they’re usually tested separately. A BCP test is often a tabletop exercise, walking through a potential disaster and its outcome to confirm every employee knows where to go and what to do. A DR test tends to be more hands-on: servers and communications get taken offline on purpose, backup technologies get implemented for real, and the institution confirms it can function within its Recovery Time Objective (RTO).
Both plans should be tested at least once a year, with the results evaluated thoroughly and the plans revised based on what the testing turns up. Neither is a static document. Both the DR plan and the BCP need to be updated as regulatory expectations change, to keep the institution compliant.
Disaster recovery and business continuity planning are genuinely hard for smaller community banks and credit unions, institutions that often don’t have the staff or resources larger organizations can draw on. The hope is always that a disaster plan never has to be used. But when it does, what matters is whether the institution was ready.
Strong BCP and DR Plan Don't Stand Alone
Explore resources to help your institution strengthen both your BCP and DR plans, and the processes that support them, from backup testing and tabletop exercises to vendor recovery capabilities and the regulatory guidance behind all of it.
