BONY will also inspect its vendors’ technology and communications capabilities more closely to ensure they function in the event of disaster, according to a report in the Financial Times, citing Thomas Renyi, chief executive of BONY.
The bank’s disaster recovery plans have been closely scrutinized by the financial services industry since it was particularly hard hit by September’s terrorist attacks and is still struggling to reconcile trades that clients executed in the weeks following (see Trade Settlement Backs up in Wake of Attack ).
Failure to Communicate
BoNY executives contend that much of the disruption was due to damaged telecommunications lines, but also point to problems with communications systems at BoNY’s vendors that may have hindered the bank’s recovery.
Renyi added that he would re-evaluate the practice of out-sourcing large volumes of business to a small number of companies, despite earlier marketing activities promoting BONY as a one-stop-shop for all back-office needs.
BoNY estimated it lost about $29m in fees from the closure of the markets and problems with its automatic teller machines, and paid about $45m to compensate customers for trades that the bank failed or was slow to execute.