BITS Publishes Telecom Guide for Financial Industry
BITS, a nonprofit consortium of 100 of the largest financial institutions in the U.S., recently published best practices to guide financial institutions in achieving diverse and resilient telecommunications services.BITS, a nonprofit consortium of 100 of the largest financial institutions in the United States, last month published the BITS Guide to Business-Critical Telecommunications Services, which is intended to advance the resiliency of telecommunications services used by the financial services industry and strengthen the nations critical infrastructure. The BITS Guide helps financial institutions better evaluate and manage risks associated with essential telecommunications services. BITS, which shares membership with The Financial Services Roundtable, was created in 1996 to foster the growth and development of electronic financial services and e-commerce for the benefit of financial institutions and their customers. BITS seeks to sustain consumer confidence and trust by ensuring the security, privacy and integrity of financial transactions. Telecommunications resiliency is critical to financial institutions, their customers, and the U.S. economy. Events like 9/11 and the 2003 Northeast blackout have illustrated the financial industrys dependence on the telecommunications sector.
Since 9/11, the CEOs of BITS member companies have collaborated with the telecommunications industry to examine and address critical interdependencies between the two sectors. Experts from the nations leading financial institutions worked with telecommunications companies and government agencies to draft the BITS Guide to Business-Critical Telecommunications Services.
- Circuit diversity is achieved through the use of multiple carriers.
Switched services in general, such as frame relay, inherently provide resiliency.
More circuits mean more resilience.
The Internet3 is inherently less reliable than telecommunications services.
Diversity can be ordered as a contracted service.
Internet Protocol (IP)-based services are not inherently reliable.
- Circuit diversity cannot be assumed when ordered from two different carriers.
Frame relay is shared among carriers and this raises concerns about diversity.
Diversity remains an issue between the financial institution premises and the telecommunications point of presence ("last mile").
The Internet worked very well during 9/11 for messaging.
Diversity must be engineered and means different things to different carriers and customers.
More small circuits require more effort to monitor than a few larger ones.
IP-based services can offer advantages.
Means other than just diversity of redundant circuits can assure resiliency of the function they must support, such as Synchronous Optical Network (SONET) and proprietary service offerings.
One can expect to pay more for telecommunications services that are specifically engineered (e.g., specialized versus standard contracting) to meet the resiliency needs of financial services companies.