Singapore pandemic will spread Aug. 28 to Sep. 11

Singapore's financial sector industry-wide exercise (IWE) will run from Thursday, Aug 28 to Friday, Sep 11, 2008. There will be three sessions corresponding to WHO phases five and six in a highly-pathogenic influenza (HPI) scenario over the two-week period, plus a "practical drill" on Friday 5 September that will require participants to execute HPI response plans at their own facilities.

Briefings for participants' exercise facilitators, and their human resources and corporate communications representatives, will be on Friday, August 15.

These are the briefing slides used at the ABS' announcement on April 3. These slides are for the first briefing on May 7, these slides are for the second briefing on June 11, these slides are for the third briefing on July 16, and these are for the fourth briefing on August 13. This slide lists the dates of future briefings and communique's.

The ABS has an IWE portal (exercise web site) specifically for the exercise.

The IWE is sponsored by the Association of Banks in Singapore (ABS) with support from the Monetary Authority of Singapore (MAS) and Singapore's Ministry of Home Affairs (MHA), which includes the Singapore Police and Civil Defence Force (the country's fire department). Singapore's Ministry of Health (MOH) will contribute, too.

• These are the MAS guidelines on pandemic measures for banks, issued in January 2006.
• These are MOH's recommended infection control measures for workplaces, last updated in May 2007.
• These are the Singapore MOH influenza alert levels (there are five; WHO has six).

The ABS has commissioned the Singapore office of KPMG to run the exercise. That allows ABS to take advantage of KPMG's size and the experience of its London office running Singapore's last IWE in May 2006, while eliminating past complaints about long-distance travel expenses, technology glitches and an implausible scenario.

Financial institutions (FIs) are contributing volunteer personnel to a scenario development team and to a working group that will manage, execute and evaluate the exercise. Each FI will also have an internal "red cell" team whose jobs will be to personalize the pain. So, you won't learn, for example, that four people have reported sick; you might learn that "Chan, Tan, Lim and Kwek, in our settlement department (all of whom actually do work in your settlement department) have all called in sick and we may not make our 16:00 payment deadline".

Why is Singapore's financial sector important?
Banking produces 11 percent of GDP (Gross Domestic Product) and employs 80,000 people in Singapore. Here's the MAS list of institutions by license category and by name, a Who's Who of global banking. The bulge bracket brigade--Citi, UBS, Credit Suisse, HSBC, Merrill Lynch--are all here, but as you can see from the list, they have plenty of company. American financial journal Barron's reported in January that Singapore is the world's second largest private banking center, behind Switzerland, and growing at 30 percent per year from new wealth in Asia.

There are almost 150 insurance companies registered in Singapore, and the regulator is eager to get them to participate in the exercise, as well. The Singapore Exchange (SGX) is also encouraging derivatives members and securities members to participate for the first time. The ABS exercise is fortuitously timed: SGX will post a rule for public comment in May to require members to prepare and test business continuity plans, so a big, public exercise provides some impetus to get started on those plans.

Scenario possibilities
In the scenario, the Singapore MOH alert level will rise quickly from green (currently) to yellow, orange and red, as an infection vector reaches Singapore. (Here's a sample scenario for how that could happen.) I understand that in the second "interactive session," the alert level will be black,

The scenario will force management to decide when to "split" their employees, sending some to a recovery site and others to work from their kitchen tables. Maybe 30 percent or more of employees won't show up for work because they are sick, scared or caring for someone who is. Customers will make fewer visits to branches, more ATM withdrawals, and be more interested in online banking. Telecom and power infrastructure might be impaired temporarily (but not long enough to embarrass local carrier Singapore Telecom, and utility service provider Singapore Power). The securities market should decline, but the derivatives market will allow some pessimists to make healthy returns.

As I wrote in January, the scenario should try to make bank executives feel viscerally the effects of an epidemic. How would one do that? Force executives to deal with multiple employees dying. But, death is a very sensitive subject in Asia, so I won't be surprised if the scenario allows participants to tread lightly around it.

Some other guesses about scenario developments:

• Banks are forced to close some branches due to employee absences, increasing demand for online banking. In addition to the obvious need for more Internet bandwidth, however, online banking in Singapore also requires an individually-assigned, serial-numbered security token for each user. The logistics of acquiring and distributing them during a pandemic may be challenging.

• Participants discover not only that 30 percent or more of their employees don't show up for work, but that those absences occur among employees performing critical functions (clearing, settlement, payments, money market trading).

• Schools close with little or no warning for up to six weeks, so one parent has to stay home. It will be simple for the "red cell" at each institution to find out from the HR department which employees actually have school-age children.

• An FI activates its commercial recovery site, but discovers it can't get all the seats it has been paying for. The MAS is particularly concerned about the capacity of the island's commercial recovery sites (provided by Hewlett-Packard, IBM, Singapore Computer Systems, SingTel) to cope with multiple, simultaneous, extended invocations.

• Employees and their families ask for and expect support that HR departments don't normally provide. Examples: If I catch this flu at work, will the bank provide my family with Tamiflu medication? If my spouse doesn't want me to come to work, will I lose my job?

Exercise price
The ABS says the exercise will cost about S$950,000 (US$700,000), and that the MAS had been asked to fund half that cost. Each participating FI will contribute its share of the other S$475,000 (US$350,000), according to its license category.

Singapore's local banks will pay top price at S$26,750 (US$19,700) each, and SGX will be close behind at S$21,400 (US$15,750). The six Qualifying Foreign Banks (Citi, ABN Amro, BNP, StanChart, HSBC and Maybank) will get bills for S$13,910 (US$10,225) each; 65 other foreign banks will each pay S$7,490 (U$S$5,500) to S$3,210 (US$2,400), according to their license categories. It will be cheap--S$3,210 (US$2,400)--for insurance companies, brokers and offshore banks to play. All amounts include Singapore's 7 percent sales tax.

Sep. 1, Monday, is Labor Day in the United States, traditionally the last day of summer vacation before everyone heads back to work or school. Some bankers in New York will be coming back from the beach early for this exercise, I imagine.

• Talkback (1)
• Print
• E-mail
• Share
• Alerts

Slashdot

Digg

Facebook

Twitter

Delicious

reddit

Google

StumbleUpon

close this

Talkback 1 comments

• Sample influenza business continuity plan
• No blood test for influenza
• Getting tested for H1N1 flu in Singapore
• Is Tamiflu 'better' than Relenza?
• BCM standard discovered in Malaysia

• Internationally-recognized BCM certifications for BCP professionals
• Sub-prime BCM certification in Asia
• Transportation Silliness at Airports
• Getting credit for having a BCP
• Tuning out supply chain risk

2009

2008

2007

2006

• What Y2K can teach us about 2012
• In remembrance: DRMs
• My favourite new features of Windows 7
• Learning to embrace Net without fear
• Changing of the IT guards

Nathaniel Forbes

Nathaniel Forbes is the director of Forbes Calamity Prevention, a Singapore-based consulting firm providing business continuity, crisis management and emergency response advice and training to multinational companies, with a focus on companies with offices in Asia. The firm is 10 years old. FCP's current and past clients include Singapore Exchange Ltd, OCBC Bank, AXA Insurance, The Gillette Company, Siemens and ABN Amro Bank. A former President of the Singapore Computer Society’s Business Continuity Group, Nathaniel passed the DRII’s Certified Business Continuity Planner (CBCP) examination in 1997. He has lived, traveled or worked in Asia since 1973.