Academic journal article ABA Banking Journal

Disaster Preparation Beats Disaster Recovery

Academic journal article ABA Banking Journal

Disaster Preparation Beats Disaster Recovery

Article excerpt

No banker wants to think about having to recover operationally from a disaster, natural or otherwise. Hurricane Andrew's two-state assault and downtown flooding in Chicago were two reminders this past year of the importance of being prepared for the worst.

Like an insurance policy you hope you'll never have to use, banks have contingency plans for dealing with such circumstances. Many have contracts with business continuity services, like Comdisco Disaster Recovery Services, Rosemont, Ill., or SunGard Recovery Services Inc., Wayne, Pa., that operate data recovery centers, also called hot sites, around the country.

Preventive medicine. But disaster recovery--or disaster preparedness, more accurately--begins at the bank. Ensuring the integrity of the data center, for instance, reduces the risk of ever needing an off-site facility to keep critical operations running. Building a new data center or overhauling an existing one to make room for additional systems provides an excellent chance for hankers to practice preventive medicine.

Several banks spent much of 1992 moving their data centers from downtown locations at their headquarters to new facilities in other towns. U.S. Bank, for example, the Portland, Ore.based lead bank subsidiary of $19 billion-assets U.S. Bancorp, opened its new data center, called Columbia Center, in suburban Gresham, Ore. On the East Coast, Chase Manhattan Bank, with $97 billion in assets, consolidated several processing centers into a super data center at its new quarters at MetroTech Center, in Brooklyn.

Other banks grappled with blending data center components of merged banks into one center. Society Corp., for example, the Cleveland-based bank holding company, is putting the finishing touches on its acquisition of Ameritrust, Society's former cross-town rival. Combining the data center applications of both institutions provided an opportunity to install new data security measures and to choose between existing systems both banks already had in place.

A closer look at all three of the above examples should suggest some preventive measures for banks considering new data centers. Quake proof. A hallmark of U.S. Bank's new Columbia Center is its resistance to damage caused by earthquakes.

"People don't usually think of Oregon as having a strong possibility of earthquakes, but historically there have been some large ones," notes Timothy Meier, the bank's senior vice-president of information services. "They're spread apart farther in time than ones in California and other areas, but there's definitely the risk of earthquakes here."

The building is designed to withstand earthquakes 30% stronger than those of the Seismic Zone 4 magnitude, which refers to quakes at the upper end of the Richter scale. Oregon is considered a Seismic Zone 2B region, meaning a more moderate quake would likely occur than a severe one.

The mainframes and other computers that handle account transactions, leasing, mortgage, and computerized banking operations are literally tied down to prevent them from bumping into each other if the floors move. Simply bolting them down would not absorb enough of the shock.

Telecommunications networks using fiber optics enter Columbia Center from two directions, approximately 90 degrees apart. One reason is to have a back-up link to other bank facilities. The other is to ensure that the fiber optic line isn't broken, since depending on which direction the earthquake fault runs, one of the lines would be roughly parallel and, therefore, the fault shouldn't sever it. If only one line were used and it were perpendicular to the fault, it would more likely be affected.

"We've never had that kind of redundancy before," says Meier, "but we do have a hot site arrangement with Comdisco with lines that go there in the event of an emergency, and we test that frequently."

Other standard contingency measures in place include water storage for cooling the large computers and sufficient diesel fuel for the generators to run the building for three days. …

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