Question

Risk may be assessed as the product of a disaster’s probability multiplied by the vulnerability and divided by the capacity to adequate response, a financial institution operating in Tampa (Florida) as compared to a financial institution in New York. What difference should they have in their risk plan towards disaster recovery and how will they ensure that customers will have access to their money when a hurricane comes through?

Answer 1

Firstly we needs to assess the risk factors that financial institution in tampa (florida) & new york faces in terms of natural disasters. We find that florida is affected mostly by hurricane whereas on the other side new york sometimes faces snow storms. So, risk plan for disaster recovery should be prepared accordingly. In this case hurricane effects are far more devastating than snow storms. Hurricane can make whole of buildings disappear within seconds. In compared to hurricane, snow storm does not cause damages to infrastructure that much. In terms of frequency hurricane occurs in every two to three year in tampa (florida), whereas new york has experienced snow storm only once in last decade. So, financial institution of tampa (florida) based on above should have very comprehensive insurance policy that covers damage of infrastructure, money, lifes of employees. Whereas on the other hand financial institution of new york need to have minimal insurance policy that covers damage to infrastructure. This will help financial institution in both places to return to normal working in shortest span of time after any disaster. Besides financial institution in florida should build there infrastructure such that impact of hurricane could be minimised & strong room (in which cash is kept) of financial institution should be such that it should not be affected by hurricane. To  ensure that customers will have access to their money when a hurricane comes through insurance policy will be the option besides above precautions.