Banking uses cloud computing to meet disaster recovery needs

Many banks are starting to use cloud computing services to meet a critical, sensitive aspect of their technical requirements: disaster recovery.

Cloud-dependent banks can lease space on servers managed by third parties, rather than managing server hardware internally. Cloud computing services are expected to save money and shorten recovery time for banks, but have so far been slow to adopt, with smaller banks acting as pioneers.

John O ' Brien, executive vice president of information technology at South Carolina State Colombia Congaree State Bank, said: "Our IT costs associated with disaster recovery are expected to be cut by half and recovery time is expected to be reduced to one-third." "He said recovery time" will only be a few hours, not now for several days. ”

The Congaree State Bank has two branches and has 122 million dollars in assets. In 2006, it started working with the security Systems Company (Safe BAE Inc.) in Georgia State, which uses the managed e-mail services provided by the latter. The bank plans to implement a managed disaster recovery service for security systems companies before the middle of this year: continuum.

Subsequently, the Congaree State Bank would change the disaster recovery plan from a redundant server that used one of the banks to a remote server using a security system company.

O ' Brien said: "This can effectively use resources, but also to help us meet regulatory requirements, the implementation of shareholder obligations, that is, have a recovery plan to get the system back to work as soon as possible." "Disaster-recovery-oriented cloud services can store data and mirror the entire network." Mirroring systems typically include software applications and configurations, mechanisms for storage and middleware, and other aspects.

In the event of a disaster, "you need to reconstruct the entire computing environment," said Bernard Golden, chief executive of Hyperstratus, a cloud computing consultancy based in San Carlos, Calif.

The bank can then continue to run its own system from far away using data links that connect to the cloud service provider. Once the bank has built up the physical site, the provider can then send the bank's mirroring system to a site that has been built again.

Some of the top manufacturers in the remote recovery industry include Crown Group, IBM and SunGard Data Systems, as well as smaller providers such as i365, Bluelock and Doyenz, a Seagate technology company. But such remote services are a worry for many banks-they are tightly regulated in how to protect customer data and where to protect them, and they are responsible for getting the system back up within hours of the failure.

"Financial institutions must know the exact location of their data," says Darren Bridges, president of security systems. He said his company put the server only in two places (one in Georgia State, the other in Utah State). "We know where the customer data is in our security site," he said. ”

However, most banks are not interested in remote disaster recovery services. According to an IT hardware survey conducted by Forrester Research company in the third quarter of 2010, only 3% of financial services companies said they planned to implement cloud-based disaster recovery services over the next 12 months. 7% of financial companies say they plan to implement the service in the coming year or so. 81% of financial companies said they were not interested, or interested, but did not plan to buy cloud products and services.

Rachel Dines, an analyst at Forrester Research, said: "The most traditional model for disaster recovery is to deliver tapes containing backup data, which has always existed." But in the long run, many banks are moving away from this model, and the main reason is that it is expensive. ”

In contrast, small banks are more active in using cloud services, and one reason is that "in general, big banks already have their own recovery facilities and data center infrastructure, so cloud-based disaster recovery is not much help for them," Gartner's system, Said John Morency, vice president of safety and risk research.

Industry experts say it is important for banks to determine how well the cloud service providers are doing with data encryption and, if the banks terminate their existing contracts, to figure out what their data will be. "Cloud computing is a new model that can reduce the cost of disaster recovery and allow banks big and small to achieve this," said Karen Jaworski, I365 's product management director. Jaworski says I365 offers a wide range of cloud storage services, including disaster recovery, for 80 to 100 financial institutions.

While determining how much the cost and time can be saved depends on the complexity of the installation system, the cost savings of banks can reach 10% to 90%, Golden said.

However, as Georgia State's Cochrane State Bank of Cochran found, it is not always possible to eliminate costs. The bank has four branches and has 209 million dollars in assets. Until February 2010, it had been using network-attached storage (NAS) servers for disaster recovery, and the server backed up data every 15 minutes. The server is housed in one of the buildings at Cochran State Bank, about 30 miles from Headquarters.

Cochran's State bank later switched to the continuum service of the security system company and completed the migration process in less than a week.

Leesa Anderson, chief technology officer at the bank, said: "The cost of maintaining hardware and disaster recovery within a bank is the same as that paid to a security system company, but the advantage is that the security systems company is ready and its hardware is ready, which no longer requires my concern. ”

According to the results of the Cochrane State Bank test, the move to cloud computing has allowed the bank to shorten the disaster recovery period from two or three days to just a few hours, says Anderson. In addition, the bank could redeploy its NAS servers to store day-to-day data, such as archived e-mails, she said.

"The biggest advantage is the reduction in recovery time," Anderson says. "It's a much shorter time than we used to recover from our previous system." ”