Hugh is a specialist in STP, automation/efficiency and outsourcing, in post-trade, clearing/settlement and treasury/payments. Before joining Colt in 2011, he worked both inside Financial Services for banks and brokers and for service providers to the sector.
The Olympics, Hurricane Sandy and even the continued unrest in the Middle East have kept business continuity and disaster recovery planning at the top of the business agenda this year.
Business continuity planning involves preparing for problems so that you can deal with them in a way that avoids, or at least minimises, business disruption. While the focus of disaster recovery planning is about getting the business back up and running following a major human-induced or natural incident – like Hurricane Sandy.
So can you really prepare for a disaster like Sandy?
As business continuity professionals, we all look for single points of failure (SPOFs) and ways to mitigate them. Low-level SPOFs tend to be covered by business continuity planning. The larger-scale SPOFs addressed by disaster recovery planning include:
The problem with Sandy was the sheer geographical area that was affected. A backup data centre will generally be around 20km–30km away from the primary data centre, to ensure a localised issue doesn't take both of them out. But Sandy was 100km wide, so an organisation's primary and backup data centres could both have been in its direct path.
How can you plan even better?
Disaster recovery planners routinely consider one- and ten-year risks. Some regulators and oversight bodies are now pushing for 100-year risks to be taken into account; and since the 2011 Japanese tsunami and earthquake – and now Sandy – they are considering even longer term scales.
That's why infrastructural organisations like central banks, clearing systems, central counterparties, stock exchanges and central securities depositories now focus on a so-called 2+1 data centre strategy, a requirement that's emerging from the European Market Infrastructure Regulation (EMIR).
This means having two data centres the usual 20km–30km apart, plus a disaster recovery centre of last resort at least 1,000 km away – far enough to be safe from the same geographically based risks – and with the required levels of resilient connectivity in between.
The question for the financial services market to consider is how far does this extend? Just the stock exchange to ensure that the market can keep operating? Or all of the market participants to ensure that the level playing field is maintained?
During the extreme situation that was Hurricane Sandy, we witnessed many of our customers moving trading capacity to Europe where that was possible; but the regulatory requirements about where data is stored and processed still need to be complied with, at the same time as safeguarding your employees.
With 20 data centres spread across Europe, Colt can deliver that combination of primary and local backup data centres and geographically remote facilities. These, coupled with our resilient, high-bandwidth local and long-distance networks, represent a real disaster recovery solution for financial services and many other industries.
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