A year has passed since the most horrific terrorist attack ever on American soil and certainly one of the most monumental events in Wall Street's history. The industry did its best to recover - to continue with business - but did so accepting a unanimous pact to learn from the lessons of that fateful day. Disaster recovery and business-continuity planning would take on new meaning from Sept. 11 onward.
The question, ringing clearly, one year later is ... Has it? Has anything really changed in the way of DR/BCP? Are the once vivid images of Sept. 11 starting to fade, allowing other issues - a recession, cost cutting, accounting fiascoes, corporate scandals - to get in the way of progress?
Immediately following the attack, financial-services firms, exchanges and vendors alike were poignantly aware of the need to dedicate more time to DR/BCP. The sentiment was that the vulnerabilities of the financial industry brought to light on that day would never be illuminated again. There were promises of creating backup-trading floors, fine tuning data centers, improving data storage, evaluating and careful rerouting phone lines, as well as regularly rehearsing evacuation, DR and BC plans. Furthermore geographic diversity would become a must.
Our cover story takes a look at the progress of one segment of the financial-services industry - the exchanges. It lays out what the NYSE, Amex, NYBOT and PHLX have in store, p 12. My interpretation? It is one year later and the exchanges are still at very preliminary stages of making any substantive changes. It is true, many of the exchanges are engaged in plans to build backup-trading facilities or find a partner to share recovery sites, however at this point these are only that - plans. The NYBOT seems to be leading the charge, however the others are still trying to hone in on a location for their backup facilities.
Of course these are big decisions. But if it takes a year to choose a location then how long will it take to build the facility, obtain the appropriate hardware, software, phone lines? Most importantly, many of the exchanges and institutions that are planning to create live backup-trading floors have to deal with new dynamics. Who will work where? How will the business be affected by dividing the trading force? Will traders still be able to feed off the excitement that often fuels a rally or a sell off? These are all issues that one year later have hardly been addressed.
The many industry executives we have asked about their recovery plans say they are completely dedicated to DR/BC planning. But I wonder where is the proof? Will things really ever change or will we go back to being complacent with the practices that were in place, and worked to some degree, on Sept. 11?