How Disaster Recovery Planning Benefits Financial Institutions
How Disaster Recovery Planning Benefits Financial Institutions
Financial institutions such as banks continually increase their online services to serve their customers better. With a disaster recovery plan in place, the banks and financial institutions can rest assured that they have a systematic strategy to resume normal operations after a natural disaster or cyberattack.
Financial institutions such as banks continually increase their online services to serve their customers better. Customers can accomplish anything from checking their account balance to making a significant banking transaction with just a few taps on their computer or smartphone.
Nevertheless, this technological progression is accompanied by a significantly increased number of cyberattacks on financial institutions. According to Security Magazine, an astounding 1,318% annual growth in ransomware attacks during the first half of 2021.
As a result, financial institutions should implement a disaster recovery plan to lessen the likelihood of experiencing monetary loss, downtime, and the loss of crucial data in the aftermath of a cyberattack.
With a disaster recovery plan in place, the banks and financial institutions can rest assured that they have a systematic strategy to resume normal operations after a natural disaster or cyberattack.
In addition, the capacity of an organization to create backups of its IT environment and recover lost data is one of the most important components of an effective disaster recovery plan.
What is a Disaster Recovery Plan and How does it benefit Financial Institutions?
A backup and disaster recovery plan is a set of preventative measures that allow organizations to restore their systems following a cyberattack or a hardware failure. Data backup and recovery plans should have a systematic strategy to help IT administrators restore data access after a disaster.
The primary objective of any bank's backup and disaster recovery plan should be the speedy restoration of mission-critical services and operations. To ensure a successful recovery, the plan may outline recommended procedures and guidelines for financial institutions to adhere to. Also, having a strong and complete third-party backup solution like Slik Protect helps keep an institution's data safe and easy to get back at any time.
A financial institution could lose access to its network and operation management system, either temporarily or permanently, depending on the severity of the disruptive incident. This causes delays, lost revenue, and a dent in the corporate image. Maintaining trust, integrity, and regulatory compliance depends on having a disaster recovery plan in place.
Problems with compliance may arise when there is downtime. The loss of data or an interruption in service could result in legal complications. Therefore, it is important to take the time and make an effort to establish a solid backup and disaster recovery plan to reduce the likelihood of a disruptive event.
The loss of existing and potential clients due to downtime can have a lasting impact on a company's reputation, similar to Michigan’s Flagster bank cyberattack which exposed the social security numbers of customers online.
Maintaining Business Operations
Maintaining operations and avoiding interruptions is easier with a disaster recovery solution that is both well-planned and well-executed. An organization that has planned for backup and recovery in the event of a disaster will be able to return to work quickly and with minimal disruption.
Advantages of Cloud-based Disaster Recovery for Financial Institutions
The cloud disaster recovery option has a few unique benefits for financial institutions, however large or small.
Easy data recovery
No disaster recovery backup, whether on-site or in the cloud, is ever used in the best-case scenario, but it's always possible that it could save the day for an organization. Cloud recovery provides an option for rapid, encrypted, and safe data backup in the event of a disaster.
Also, a cloud hosting system may be set up much more quickly than on-premises alternatives because an external provider handles most cloud backups. Most cloud recovery solutions also make it easy to move data back to the main system once the situation is under control.
On-premises disaster recovery infrastructure might have high initial expenditures, which can be prohibitive for small and medium-sized financial institutions like credit unions and community banks. Since cloud recovery solution providers usually only require a small fee to have access to the service, the institution only must pay for it when the cloud recovery system is placed into production, significantly reducing upfront expenses.
When implementing a disaster recovery strategy, many regional banks simply don't have the resources to do it internally. While major disasters are uncommon, even a single server outage or hardware glitch can cause significant stress for the staff. To reduce the pressure on the in-house team, consider hiring the services of a cloud disaster recovery service provider capable of assembling a data recovery team as needed.
Community banks and NBFCs are typical examples of financial organizations with branches concentrated in a single area. Several locations will likely be destroyed at once if a natural disaster strikes. Because of this, banks should back up their information in a separate, geographically dispersed place.
A cloud recovery solution excels in this scenario because cloud servers are typically located in different zones, reducing the likelihood that a single catastrophic incident will destroy all data or render it unrecoverable.
A financial institution can perform a near-instantaneous failover to a secondary cloud environment with the help of disaster recovery as a service (DRaaS). By coordinating backups, organizations can reduce the time it takes to recover data and reach the targeted RPO.
The financial industry faces a constantly evolving difficulty in keeping track of and storing data as digital channels continue to expand. Using the cloud for data recovery can be a scalable, low-cost, and adaptable part of the organization's disaster recovery strategy.
Financial institutions should choose a DRaaS service that addresses their industry challenges. Partnering with a cloud-based disaster recovery provider can provide the level of business continuity to give the organization peace of mind and win the bankers' trust.