Disaster Recovery for Financial Firms
Updated: Jan 17, 2019
A few decades ago financial firms and pretty much every other business were wary of natural disasters such as fire, floods, hurricanes and the likes disrupting normal operations. Today, the landscape is different. Financial firms are driven by IT systems, a feat that makes disaster recovery plans complex and even more important. One glitch and you might lose lots of cash or even the entire business! We have seen this happen to banks like the National Bank of Australia (NAB) who apparently lost $7.4 million in compensation for damages related to an outage https://www.afr.com/technology/enterprise-it/nabs-payments-systems-outage-cost-it-millions-in-compensation-20181116-h17ysd. Now, in this article we will be telling you why every financial firm ought to have a solid disaster recovery plan in place. Let’s delve in, shall we?
What is a Disaster Recovery Plan?
For starters, what is a disaster recovery plan all about?
As you might have guessed, it has got something with getting business functions back up and running in the case any form of disaster strikes. To be precise, a disaster recovery plan is a step by step guide detailing ways of cushioning mission critical operations if there is a major problem hence ensuring business continuity. This is particularly essential in the financial firms which rely on digital records and applications for day-to-day transactions. Let’s expound on this further.
The Importance of Financial Firms Having Disaster Recovery Plans
Fast Data Recovery
Financial firms are data driven, that’s why it is essential to have a disaster recovery plan that ensures speedy recovery and restoration of critical applications should an outage occur. This plan ensures that the normal operations can continue even when there is a downtime like network failure or some sort of a physical or natural disaster like floods, a fire outbreak, theft etc. Having such a proper fallback plan can also afford a business that competitive edge in the case a downtime or such a disaster is common among direct competitors.
A lack of a proper disaster recovery plan might also translate to a loss of consumer trust. It is a digital world and disgruntled consumers might spread a wave of dissatisfaction leading to the loss of even more customers. Remember, customers only queue up for top draw services whether a firm is dealing with a disaster or not. A disaster recovery plan can thus come in handy in ensuring financial firms are at the top of their game always, in matters customer service.
Business perspective aside, having a disaster recovery plan is also essential in complying with the regulations in the financial sector. One of them is the General Data Protection Regulation (GDPR) which has a clause on the ability to restore data availability and access in the event of an incident https://ec.europa.eu/commission/priorities/justice-and-fundamental-rights/data-protection/2018-reform-eu-data-protection-rules_en . There are other regulations that have been proposed with an aim of punishing firms for costly outages. A good example is the Financial Conduct Authority (FCA) in the UK which is looking to compel banks to reveal IT outages publicly https://www.itpro.co.uk/business-operations/31714/uk-banks-must-publish-it-outages-and-data-disasters-online. The same threat has been signaled to Australia’s big banks and credit card schemes by Reserve Bank of Australia (RBA) https://www.itnews.com.au/news/rba-prepares-to-red-card-bank-outages-and-upgrade-delays-516065.
These are just but a few reasons why your firm needs to be prepared for disaster. You can always talk to our disaster recovery experts to help your business protect data and keep your operations running smoothly even when there is a problem. After all, prevention is always better than cure plus it is more of a necessity in a world where cyber-attacks are on the rise.