FRM Part II · FRM Exam Part II · Case Study: Third-party Risk Management
A bank's contract with a payment processor sets a service-level target of 99.9% availability over a 30-day month (43,200 minutes). In the month, the processor had outages totaling 90 minutes. What is the measured availability, and is the SLA met?
Availability is 1 minus 90/43,200, which is about 99.79%. The 99.9% target allows only 43.2 minutes of downtime in the month, so 90 minutes of outage means the SLA is breached.
- A99.79%; SLA breachedCorrect
- B99.90%; SLA met exactly
- C99.95%; SLA met
- D99.21%; SLA breached
Explanation
Allowed downtime = 0.1% x 43,200 = 43.2 minutes. Actual downtime of 90 minutes gives availability = 1 - 90/43,200 = 1 - 0.002083 = 99.79%. This is below 99.9%, so the SLA is breached. Treating 90 minutes as 0.1% of a day-based figure would give a wrong result.
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