UK banks need to think ahead and communicate more when faced with a terrorist attack, according to the results of a drill carried out across the City of London.
Although short-term responses were good, financial instutions should be able to plan, even in a crisis, said a report issued five months after the market-wide exercise was held in London's financial district.
The drill started with a breakdown in the interbank transfer systems, followed by terrorist "bombings" around London. The scenario integrated UK government authorities and law enforcement with the private sector, testing how well institutions could react to a disaster. It was organised by the Tripartite Authorities, a group comprising the Financial Services Authority, the UK Treasury Department and the Bank of England.
An executive summary of the report was released, and a private report was issued to organisations that participated, said Rick Cudworth, a partner at consulting company KPMG who heads the firm's Business Continuity Services.
KPMG and crisis-readiness firm Crisis Solutions coordinated the exercise, which included on-site monitors to record how organisations reacted. More than 80 businesses, including large banks such as HSBC, participated in the exercise, held last November.
Institutions were faced with decisions such as whether to move operations to back-up sites, how to ensure safe transportation of employees and how to react to decisions by UK civil authorities.
"We found that people were very focused on the very immediate issues," Cudworth said. "It was a quite fast-moving event, and many people seemed to deal with what was coming at them."
Ideally, institutions should also be able to think ahead about other potential situations that could arise and the effect on their operations, the report said. Organisations also underestimated the effect of civil actions, such as police cordons, that restrict access to buildings.
Unsurprisingly, the report said those organisations that prepared for the drill benefited the most. It also suggested refinement of the Financial Services Authority damage-assessment tool, with more attention on how it can be kept up-to-date as information changes.
The report stressed better communications among institutions themselves, as well as government authorities.
"We are emphasising, again, that no organisation is an island," Cudworth said.