WE’RE HEARING dozens of tornados ripped through Oklahoma yesterday, destroying or damaging some 300 homes, according to CNN. The network also reported that some
Early reporting, naturally, focuses on the human toll from major storm damage. But there are other costs as well. Plenty of people have been displaced from their offices and lots of companies are struggling to get back up and running. Just ask Rentsys Recovery Services, a provider of disaster recovery and business continuity services.
Walt Thomasson, managing director at the firm, told me that mortgage companies and other financial firms are generally ahead of the curve when it comes to having a disaster recovery plan in place, in part because of regulations that mandate they have backup preparations. Most are subject to audits from the FFIEC in which examiners take a look at their disaster recovery plans.
Banking firms also have added concerns about maintaining the privacy of consumer data and security around financial transactions to take into account. That government oversight has created headaches, but technology around recovery and continuity is catching up to make it more cost effective for firms to have a tested, reliable recovery plan in place, Thomasson said.
And financial firms have come along way as technology has advanced. Gone are the days when data were backed up onto a tape and put in the trunk of the IT director’s car.
“We do a very good job today of getting that data offsite. That’s been ingrained into our minds.”
But what sometimes gets overlooked, Thomasson said, is the recoverability component of disaster recovery. How can a lender get access to the data if it is displaced from its office? What systems and hardware are needed to get up and running again?
In many cases, work trucks or co-location sites provided by Rentsys or other recovery firms are brought in to do the job.
Thomasson said having a recovery plan in place often involves baby steps that guide a firm through the process and test the procedures that they will rely upon when a disruption occurs.
Still, plenty of financial firms are underprepared or haven’t adequately tested their recovery plans, he said. And the growing reliance upon cloud computing and mobile devices is adding new wrinkles to the disaster recovery business. He sees a need for more expertise around cloud computing and how it will affect recovery plans.
“There is a lot of confusion around the cloud and just what it is,” Thomasson told me.
Rentsys defines cloud computing as access to data and the use of applications via the Internet. That leaves companies dependent upon some combination of private and public networks to run their business. A firm’s mission critical data is essentially living someplace outside of its own offices and infrastructure.
“The dependence upon stable networks and the public network are going to be critical to the continuity of a company,” he said.
Fortunately, the Sept. 11, 2001 terrorist attacks created a new sense of urgency around data recoverability, he said.
“Post-9/11, every decision you make in IT has a disaster recovery and continuity component to it,” he said.
More recently, Hurricane Sandy illustrated the inadequacy of many companies’ preparations. Their basic disaster recovery plan was to have people stay home and work from their own laptops or home computers. But many didn’t have access to their company’s data sources. And with the power out for many—in some cases for weeks on end—working from home wasn’t always an option. The Boston Marathon bombings also created the need for companies to invoke their recovery plans, as the lockdown of much of Boston in the days immediately following the bombing left firms without access to their offices.
Many firms use a hybrid model, relying on both private cloud and public cloud resources. The private cloud consists of their own data center and the circuits required to access it. The key is to have systems in place so that employees can access that private network if their normal work resources are lost.
Thomason said too often, people continue to have an “it will never happen to me” mentality that deters them from preparing for a worst-case scenario.
But while high profile disasters and attacks grab the nation’s attention, Thomasson said the most frequent reason companies have to invoke their disaster recovery plan is much more mundane.
“Loss of power is the number one reason why companies invoke a disaster plan,” he said. “Loss of power happens every day all around the country.”
Ted Cornwell has covered the mortgage markets since 1990. He is a former editor of both Mortgage Servicing News and Mortgage Technology.
