In the past, when it came to business continuity planning (BCP), brokerage firms were focused on a 9/11-type disaster in which a company's primary offices would be unavailable but alternative trading venues and sales facilities would provide a viable option for conducting business. Recently, however, the focus has begun to shift.
CIOs now find themselves preparing for situations such as an avian flu pandemic, in which, according to a February 2006 Sun Microsystems white paper, "30 to 50 percent of the workforce may get sick or be absent from work. Traders, and theoretically the entire population in a given region, could be quarantined for an extended period of time." As a result, there is a shift in disaster preparedness toward the implementation of technology that allows traders and sales staff to access their desktops, phones and trading turrets remotely.
But as firms build out these systems, there are several challenges for which there may not be answers. For example, traders are used to working in an environment where information is at their fingertips, often gathered through collaboration with other people. But those people may not be available when accessing a trading system from home. Further, even if a firm were to develop a network that allowed its traders to securely enter orders and collaborate with others in the firm, there is no guarantee that it would be able to communicate with other firms, as not all firms are equally prepared or would be equally affected in a given disaster.
Unfortunately, current industrywide BCP efforts are unable to address these inherent challenges. Still, exchanges and individual firms actively are building out their own solutions to mitigate the risk of a pandemic or similar business disruption.