5 advantages of a cloud disaster recovery plan
Once upon a time, maintaining a physical datacenter or cloud-based backup was an expensive proposition that only the largest financial institutions could afford. The cost of facilities, coupled with the management burden of keeping data in-sync and updated, became a budgetary blackhole for many institutions.
However, thanks to advances in virtualization and cloud technologies, modern data recovery options are now affordable for most banks and credit unions seeking to update their disaster recovery plan (DRP).
Even though natural disasters like hurricanes, tornados and ice storms tend to be rare, they have the potential to cause catastrophic damage to organizations that find themselves unprepared. Cyberattacks and data breaches, on the other hand, occur with increasing frequency. According to a recent Verizon report, 58% of all data breaches in 2020 targeted personal data.
But maintaining a DRP isn’t just good for risk management—there are compliance considerations as well. Disaster recovery planning for financial institutions is still required by regulators. GLBA, FFIEC, EFA and a host of other compliance requirements specific to financial institutions increase the compliance liability of banks and credit unions nationwide.
Currently, financial institutions have a few options for storing and recovering data during a disaster:
- 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 backup, but there is no capability of recovery if the servers themselves are damaged or fail.
- Maintaining a secondary datacenter: Institutions own backup servers that exist solely to support the IT environment during a crisis or disaster. These servers are usually located away from the main datacenter and are managed and operated by internal staff members.
- Cloud data backup and recovery: Usually hosted by a third-party cloud provider, a cloud recovery solution acts as an “as-needed” safeguard during a disaster. Cloud servers can be used in tandem with a physical backup (known as a hybrid system), or as a complete data backup of your entire IT environment.
While on-premises, secondary datacenter and cloud data disaster recovery options are viable in today’s data-first financial sector, the cloud recovery option offers a few advantages to institutions of every size.
- Geographic separation: Most financial institutions, especially community banks and credit unions, maintain branches within a specific geographic location. If a catastrophe occurs (a tornado, hurricane, ice storm, etc.) there is a chance they will lose multiple branches simultaneously. That means any on-premises servers may be casualties. Cloud servers are usually hosted in multiple FEMA zones, assuring no single catastrophic event would wipe out all of your data or render it unrecoverable.
- Ease of data transfer: Hopefully your institution will never need to utilize a disaster recovery backup, whether on-premises or cloud-based. If the need does arise, cloud recovery offers a secure, encrypted and fast backup option. In addition, most cloud recovery solutions offer a simple means of switching data back to your main datacenter once a disaster has lifted.
- A deep bench: Many financial institutions don’t have the luxury of a deep bench of internal staff members dedicated to executing a DRP. And while large-scale disasters are rare, even the occasional server malfunction or hardware issue can put undue strain on your employees. Cloud disaster recovery as a service can take the burden off your staff.
- Cost-efficiency: For community banks and credit unions, the upfront costs associated with on-premises disaster recovery infrastructure can be massive. Using a cloud recovery solution can decrease overall costs because vendors usually charge a small retainer for access to the service.
- 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.
The bottom line is that managing and storing data in the financial sector is a dynamic challenge that will only increase as digital channels further expand. Cloud data recovery offers a flexible, cost-effective and scalable option in a disaster recovery plan.