Moves to Outsourcing Force Pace of Disaster Recovery Strategies

Financial News, September 17, 2001 | Go to article overview

Moves to Outsourcing Force Pace of Disaster Recovery Strategies


Global custodians have long been aware of an interesting paradox: if their operations go down, they can probably survive the experience - but some of their clients may not.

Such has become the dependency of many asset managers on their custodians that they literally cannot live without them. Ten years ago, managers might have chosen to work with two or three preferred custodians, spreading the risk and building in some measure of contingency in the event that one should have processing problems. Today, however, an increasing number of managers are actively seeking to appoint a single custodian, concentrating their risk on a single provider.

With outsourcing of managers' middle and back offices now an established business model, the need for watertight disaster recovery procedures has never been greater. Most requests for proposal include lengthy and highly technical questions about the scope and scale of back-up facilities and contingency planning. Arcane and tedious it may be, but managers and their advisers realise that the health of their business may largely depend on how well their custodians respond to abnormal conditions.

As a result, the big custodians have taken a number of steps to protect themselves and their clients from any long-term service disruptions. Regular dry runs are undertaken, switching between main and back-up systems, with the occasional involvement of senior management teams to rehearse contact procedures and fine-tune action plans. Some firms use the weekends to practise reconstructing business days.

In 1996, one big custodian had the chance to put its well-documented disaster recovery blueprint into action. When the IRA bombed London's Canary Wharf tower, State Street was one of the larger tenants of the 50-storey building, from where it ran its UK custody operations as well as much of its European client servicing. With back-up facilities based in Hertfordshire, a county north of London, State Street lost only minutes of normal service as implementation of its plan worked almost faultlessly.

Today, an attack on Canary Wharf would undoubtedly wreak more havoc in the custody business than five years ago. State Street has been joined in the tower by Clearstream and the Bank of New York, while HSBC, Citigroup and Northern Trust will shortly move into the area. Even so, the vast bulk of operational facilities will continue to be housed in other locations.

Banks that have a large presence in the UK and mainland Europe have chosen a number of diverse operating centres: Bournemouth, on the south coast of England, for JP Morgan; Brussels for the Bank of New York; Edinburgh for Deutsche Bank, and Dublin for Citibank. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Moves to Outsourcing Force Pace of Disaster Recovery Strategies
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.