FSTC’s2008 Annual Conference

On the Innovative Edge:Successful Strategies for

Financial Services

Industry Navigators

The Financial Services Technology

Consortium

Empowering the Industry Through Innovative Ideas

FSTC’s2008 Annual Conference

On the Innovative Edge:Successful Strategies for

Financial Services

Industry Navigators

Business Resiliency – A Global Challenge

Sponsored by:

© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

FSTC Annual Conference 2008:

Business Resiliency: a Global Challenge

Kathryn WakemanKathryn WakemanGlobal Head of Resiliency Risk ManagementGlobal Head of Resiliency Risk Management

4© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Senior management focus

Business engagement

Third parties Global Regulations

The main challenges

5© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Argentina Buenos Aires Australia Adelaide Brisbane Buderim Canberra Gold Coast Melbourne Perth Sydney Austria Vienna Bahamas Nassau Bahrain Manama Belgium Brussels Brazil Rio de J aneiroSão Paulo Canada Calgary Montreal Toronto Vancouver Cayman Islands Georgetown Channel Islands J ersey Chile Santiago China Beijing Hong Kong Shanghai Shenzhen Tianjin Colombia BogotáCzech Republic Prague Egypt Cairo France Paris Germany Berlin Frankfurt Munich Greece Piraeus India Mumbai New Delhi Indonesia J akarta Ireland Dublin Israel Tel Aviv Italy Milan Rome J apanOsaka Tokyo Lebanon Beirut Luxembourg Malaysia Kuala Lumpur Labuan Selangor Mexico Mexico City Monterrey The Netherlands Amsterdam New Zealand Auckland Nigeria Lagos Norway OsloPakistan Karachi Peru Lima Philippines Manila Poland Warsaw Portugal Lisbon Russian Federation Moscow Singapore South Africa J ohannesburg South Korea Seoul Spain Bilboa Madrid Sri LankaColombo Sweden Stockholm Switzerland Geneva Zurich Taiwan Pan Chiao City Taipei Thailand Bangkok Turkey Istanbul United Kingdom Bournemouth Edinburgh Essex Glasgow Isle of ManLondon Uzbekistan Tashkent Venezuela Caracas Vietnam Hanoi Ho Chi Minh City Argentina Buenos Aires Australia Adelaide Brisbane Buderim Canberra Gold Coast Melbourne Perth Sydney AustriaVienna Bahamas Nassau Bahrain Manama Belgium Brussels Brazil Rio de J aneiro São Paulo Canada Calgary Montreal Toronto Vancouver Cayman Islands Georgetown Channel Islands J ersey ChileSantiago China Beijing Hong Kong Shanghai Shenzhen Tianjin Colombia Bogotá Czech Republic Prague Egypt Cairo France Paris Germany Berlin Frankfurt Munich Greece Piraeus India MumbaiNew Delhi Indonesia J akarta Ireland Dublin Israel Tel Aviv Italy Milan Rome J apan Osaka Tokyo Lebanon Beirut Luxembourg Malaysia Kuala Lumpur Labuan Selangor Mexico Mexico CityMonterrey The Netherlands Amsterdam New Zealand Auckland Nigeria Lagos Norway Oslo Pakistan Karachi Peru Lima Philippines Manila Poland Warsaw Portugal Lisbon Russian FederationMoscow Singapore South Africa J ohannesburg South Korea Seoul Spain Bilboa Madrid Sri Lanka Colombo Sweden Stockholm Switzerland Geneva Zurich Taiwan Pan Chiao City Taipei ThailandBangkok Turkey Istanbul United Kingdom Bournemouth Edinburgh Essex Glasgow Isle of Man London Uzbekistan Tashkent Venezuela Caracas Vietnam Hanoi Ho Chi Minh City Argentina BuenosAires Australia Adelaide Brisbane Buderim Canberra Gold Coast Melbourne Perth Sydney Austria Vienna Bahamas Nassau Bahrain Manama Belgium Brussels Brazil Rio de J aneiro São Paulo CanadaCalgary Montreal Toronto Vancouver Cayman Islands Georgetown Channel Islands J ersey Chile Santiago China Beijing Hong Kong Shanghai Shenzhen Tianjin Colombia Bogotá Czech RepublicPrague Egypt Cairo France Paris Germany Berlin Frankfurt Munich Greece Piraeus India Mumbai New Delhi Indonesia J akarta Ireland Dublin Israel Tel Aviv Italy Milan Rome J apan Osaka TokyoLebanon Beirut Luxembourg Malaysia Kuala Lumpur Labuan Selangor Mexico Mexico City Monterrey The Netherlands Amsterdam New Zealand Auckland Nigeria Lagos Norway Oslo PakistanKarachi Peru Lima Philippines Manila Poland Warsaw Portugal Lisbon Russian Federation Moscow Singapore South Africa J ohannesburg South Korea Seoul Spain Bilboa Madrid Sri Lanka ColomboSweden Stockholm Switzerland Geneva Zurich Taiwan Pan Chiao City Taipei Thailand Bangkok Turkey Istanbul United Kingdom Bournemouth Edinburgh Essex Glasgow Isle of Man LondonUzbekistan Tashkent Venezuela Caracas Vietnam Hanoi Ho Chi Minh City Argentina Buenos Aires Australia Adelaide Brisbane Buderim Canberra Gold Coast Melbourne Perth Sydney Austria ViennaBahamas Nassau Bahrain Manama Belgium Brussels Brazil Rio de J aneiro São Paulo Canada Calgary Montreal Toronto Vancouver Cayman Islands Georgetown Channel Islands J ersey Chile SantiagoChina Beijing Hong Kong Shanghai Shenzhen Tianjin Colombia Bogotá Czech Republic Prague Egypt Cairo France Paris Germany Berlin Frankfurt Munich Greece Piraeus India Mumbai New DelhiIndonesia J akarta Ireland Dublin Israel Tel Aviv Italy Milan Rome Japan Osaka Tokyo Lebanon Beirut Luxembourg Malaysia Kuala Lumpur Labuan Selangor Mexico Mexico City Monterrey TheNetherlands Amsterdam New Zealand Auckland Nigeria Lagos Norway Oslo Pakistan Karachi Peru Lima Philippines Manila Poland Warsaw Portugal Lisbon Russian Federation Moscow SingaporeSouth Africa J ohannesburg South Korea Seoul Spain Bilboa Madrid Sri Lanka Colombo Sweden Stockholm Switzerland Geneva Zurich Taiwan Pan Chiao City Taipei Thailand Bangkok TurkeyIstanbul United Kingdom Bournemouth Edinburgh Essex Glasgow Isle of Man London Uzbekistan Tashkent Venezuela Caracas Vietnam Hanoi Ho Chi Minh City Argentina Buenos Aires AustraliaAdelaide Brisbane Buderim Canberra Gold Coast Melbourne Perth Sydney Austria Vienna Bahamas Nassau Bahrain Manama Belgium Brussels Brazil Rio de J aneiro São Paulo Canada CalgaryMontreal Toronto Vancouver Cayman Islands Georgetown Channel Islands J ersey Chile Santiago China Beijing Hong Kong Shanghai Shenzhen Tianjin Colombia Bogotá Czech Republic Prague EgyptCairo France Paris Germany Berlin Frankfurt Munich Greece Piraeus India Mumbai New Delhi Indonesia J akarta Ireland Dublin Israel Tel Aviv Italy Milan Rome J apan Osaka Tokyo Lebanon BeirutLuxembourg Malaysia Kuala Lumpur Labuan Selangor Mexico Mexico City Monterrey The Netherlands Amsterdam New Zealand Auckland Nigeria Lagos Norway Oslo Pakistan Karachi Peru LimaPhilippines Manila Poland Warsaw Portugal Lisbon Russian Federation Moscow Singapore South Africa J ohannesburg South Korea Seoul Spain Bilboa Madrid Sri Lanka Colombo SwedenStockholm Switzerland Geneva Zurich Taiwan Pan Chiao City Taipei Thailand Bangkok Turkey Istanbul United Kingdom Bournemouth Edinburgh Essex Glasgow Isle of Man London UzbekistanTashkent Venezuela Caracas Vietnam Hanoi Ho Chi Minh City Argentina Buenos Aires Australia Adelaide Brisbane Buderim Canberra Gold Coast Melbourne Perth Sydney Austria Vienna Bahamas

JPMorgan Chase – global firm, global challenges

6© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Global firm, global challenges – Katrina 2005

7© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Global firm, global challenges – Mumbai 2006

8© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Global firm, global challenges – UK 2007

9© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Global firm, global challenges – San Diego 2007

10© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Global firm, global challenges – NY Steampipe ‘07

11© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Senior management focus

12© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Senior management focus - incidents

13© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Meaningful Management InformationTimely and focused incident reportingTesting and reporting results in plain English

Senior management focus - testing

14© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Senior management focus – calendarised program

•Weekly senior management meeting to review incidents and resiliency•Weekly resiliency risk leadership team meeting•Monthly review of resiliency metrics•Semi-annual reports by each line of business•Annual report to Audit Committee

15© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Holding the business accountable

Absolute clarity over ownership

Regular, calendarised reporting

Strong risk management and governance

Decent compliance metrics

16© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Holding the business accountable – regular reporting

Line of Business Semi-Annual ReportInitiatives Compliance Status

•Previously reported initiatives•Status•Original due date•Revised due date

New initiativesStatusDue date

Accomplishments/Program Improvements in last 6 months

Compliance Metrics (BIAs, Plans, Tests) BIAs Updated - % Business Plans Updated - % Business Plans Tested - %Technology Plans Updated - %Technology Plans Tested - %Comments on Gaps-

Significant Test Issues Issue Status

Regulatory Compliance / Internal Audit Issues Issue Status

Plan Activations Background Lessons Learned

Key Risks/Issues Pandemic Preparedness UpdateTop 10 risks/issues

RiskImpact to LOBMitigation

PlanningTestingCritical Third Parties•Open Issues

•Status•Due Date

17© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Meaningful Management Information

Holding the business accountable: meaningful metrics

18© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

How resilient (ie tough) are we ?

Where are we exposed ?

How can we improve ?

How do we compare with our peers ?

Are we spending the right amount?

Holding the business accountable: meaningful metrics

19© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Set tolerance levels

Flag exceptions, show trends

Track issues from tests

Benchmark against peers, industry standards

Measure business impact

Report number of outstanding audit and regulatory actions

Holding the business accountable: meaningful metrics

20© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Essential to understand third party resilience

Test with financial infrastructure

Understand capabilities of utility providers

Need for common certification tool

Third parties

21© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Examples of regulations/industry standards

Interagency White Paper

FFIEC handbook

Basel II

BS25999

NASD rulesNYSE Rule 446

OCC 2001-47

FSMA (UK)

NFPA 1600

FSA BCM Guide

SEC rules

HKMA Policy Manual

22© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

Senior Management focus

Business engagement

Third parties Global Regulations

Recap

23© 2007 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC

QUESTIONS ?

FSTC’s2008 Annual Conference

On the Innovative Edge:Successful Strategies for

Financial Services

Industry Navigators

Afternoon BreakSponsored by: