Any business that maintains and uses data should have a means of backing up and recovering that data in the event of a disaster or cyber incident. For organizations that handle sensitive information — such as financial institutions — creating a disaster recovery plan is critical.
The goal of a disaster recovery plan (DRP) is straightforward: ensure your organization has a structured plan to recover business operations should a disaster or cyberattack occur. A foundational element of your DRP is the ability to back up your IT environment and recover data. Thankfully, cloud technology provides affordable, efficient modern data recovery options.
What is Disaster Recovery for Regulated Institutions?
It’s no secret that digital channels reign supreme, especially in the financial sector. Managing data is now fundamentally important, both from a customer experience and a compliance perspective. Therefore, financial institutions and other regulated organizations must prioritize and plan for efficient and rapid disaster recovery to satisfy compliance requirements, minimize downtime and meet the expectations of consumers during and after a disaster or disruptive event.
Disasters like hurricanes, tornadoes and ice storms have the potential to cause catastrophic damage to organizations that find themselves unprepared. Unlike the risk of a weather-related incident, threats of cyberattacks and data breaches loom large and are occurring with increasing frequency. According to a recent Verizon Report, personal data is one of the most desirable data types to cybercriminals, as this information can be resold or used for financial fraud.
Maintaining a DRP isn’t just a strategy to mitigate risk: there are compliance considerations as well. Though disaster recovery planning for financial institutions and other regulated organizations is not as all-encompassing as business continuity planning, it is still required by regulators.
What is Cloud Disaster Recovery?
For most institutions, maintaining a complete secondary datacenter is an unrealistic expense. The only true data recovery options for small- to mid-sized institutions center on cloud vs. on-premises. But which option provides the best security, reliability and return on your investment? As the volume, complexity and business value of data continue to increase, the prevalence of implementing cloud disaster recovery is increasingly apparent.
A cloud disaster recovery solution acts as an “as needed” safeguard during a disaster. Cloud servers can be used along with a physical backup (known as a hybrid system) or as a complete data backup of your entire IT environment.
Another option for organizations is on-premises data backup and recovery. Data is backed up locally and transported to a storage medium. In this scenario, data can be restored via the backup; however, this approach comes with increased risk since there is no capability of recovery if the servers themselves fail or are damaged.
Some organizations opt for maintaining a secondary datacenter. During a crisis or disaster, institutions rely on their own backup servers that exist solely to support the IT environment. These servers are usually located away from the main datacenter to mitigate the risk of a localized disaster and managed by internal staff members.
The Advantages of Cloud Disaster Recovery
While on-premises, secondary datacenter and cloud data disaster recovery options are all viable in today’s data-first world, the cloud recovery option offers several advantages to institutions of every size:
1. Geo-Separation: Most financial institutions maintain branches within a specific geographic location. If a catastrophe such as a tornado, hurricane or ice storm occurs, multiple branches are likely to be affected simultaneously. That means any on-premises servers were likely a casualty of the disaster. In this situation, cloud disaster recovery shines because cloud servers are usually hosted in multiple FEMA Zones, seemingly eliminating the risk that a single catastrophic event would wipe out all your data or render it unrecoverable.
2. Ease of Data Transfer: With any luck, your organization will never need to utilize a disaster recovery backup of any kind. But should the need arise, cloud recovery offers a secure, encrypted and expedient backup option. And because most cloud backups are managed by a third-party provider, a cloud hosting environment is generated faster than most on-premises solutions. In addition, most cloud recovery solutions have a streamlined process for switching data back to your main datacenter once a disaster has lifted.
3. A Sizeable Team: Many institutions don’t have the luxury of a large team of experienced internal staff members dedicated to executing a disaster recovery plan. And while large-scale disasters are rare, even the occasional server malfunction or hardware issue can put undue strain on employees.
4. Cost Efficiency: For most organizations, the upfront costs associated with on-premises disaster recovery infrastructure can be massive. Using cloud disaster recovery can decrease overall costs because vendors usually charge a small retainer for access to the service, meaning that the organization only incurs additional cost when the cloud recovery system is put into production.
5. Compliance Standards: Most cloud recovery vendors specific to financial institutions will review and update their cloud environment to ensure compliance, auditing and financial industry standards are implemented. These regulatory updates are advantageous to smaller institutions that are unable to dedicate employee bandwidth to ensure compliance standards are up to par. To further mitigate risk and enhance compliance posture, ensure the institution’s disaster recovery plan is up to date and ready annually.
Embracing Cloud Backup and Recovery
For many IT executives, disaster recovery can feel a lot like insurance, even though it’s a requirement for regulated institutions. But the utility of data backup and recovery extends beyond the realm of the catastrophic.
Even minor inconveniences like the accidental deletion of data and hardware or software failure are enough to burden internal IT staff. And the loss of a single server can disrupt business operations, damaging the customer experience and hurting the bottom line.
It’s clear that data backups are essential, and cloud backups are excellent tools for managing both major and minor events because they allow any server to be accessed and temporarily run on a secure environment, and backup data to be recovered as needed.
The primary takeaway for financial institutions and other regulated organizations: managing and storing data is a dynamic challenge that will only increase as digital channels thrive. Cloud data recovery offers a flexible, cost-effective and scalable option for a disaster recovery plan.