Four Reasons Why Financial Firms Need Data Backups
With threats of data loss increasing in both numbers and severity, it is no surprise that data security is on everyone’s mind within the financial and investment industry. Regulatory agencies and investors now expect businesses to have backup solutions and comprehensive record-keeping practices. Understanding the need and importance of implementing a backup solution can add instrumental value to your business.
We at Eze Castle Integration have identified the top four reasons why backups are critical to not only a firm’s growth, but also their survival.
1. Regulatory agencies demand security of financial records.
The Securities and Exchange Commission (SEC) has instituted regulations on the storage of financial records and electronic communication, and financial industry regulatory agencies such as FINRA now provide standards and guidance information on potential threats. In addition, international regulators such as the FCA, a financial regulatory body in the United Kingdom, are also demanding firms to have a data backup solution.
The reasoning behind these recommendations is the volume of things that can go wrong with your data storage solution. From hardware failure, software corruption, virus or network security breaches, to natural disasters and human error, the threat to your data is endless. With today’s financial services companies managing exponentially growing volumes of sensitive data, the risk of loss grows as well.
Regulatory and compliance organizations recognize the necessity of data security and advocate for firms to have a comprehensive backup solution in place. Businesses that demonstrate that their data is secure and backed up have a competitive edge when security questions inevitably come their way.
2. Disaster recovery does not mean data backup.
It’s imperative to understand the difference between backups and disaster recovery when thinking about your firm’s security plans. Disaster recovery, or DR, simply replicates the production. If something were to happen to the data center where your production system lives, you can resume operations in DR. However, if something is deleted in the production environment, that action is typically mirrored, thus deleted in DR as well. Backups, on the other hand, create an offline copy of your data which is not accessible except to restore, sometimes utilizing a third-party vendor to store that data in an alternate location. If access to a file was lost in both production and DR, backups grant the ability to recover the data and continue business as usual.
As reported by Gartner in the 2015 Gartner MQ Report for Enterprise Backup Software and Integrated Appliances, by 2017, the number of enterprises using the cloud as a backup destination will double, growing from twelve percent (12%) today. And by 2017, seventy-five percent (75%) of organizations will have replaced their remote-office tape backup with a disk-based backup solution that incorporates replication, up from forty-five percent (45%) today. Having a third-party backup solution provides geographic diversity of data assets, which is key for a complete business strategy.
3. A strategic business plan is not complete without a backup solution.
Consider the impact to your business if you lost the data held in your CRM, financial, or reporting systems. Loss of this data can be detrimental to a business. According to a study by the Gartner Group, forty-three percent (43%) of companies were immediately put out of business by a “major loss” of computer records, and another fifty-one percent (51%) permanently closed within two years, resulting in a six percent (6%) survival rate.
Backups should be an integrated part of not only the IT department, but of the overall business strategy. If all of your data is held within one environment, or if there was a breach of security by natural disaster, fraud, or software/hardware malfunction, not only is your data lost, but also your backup. Both DR and backups are vital to ensure continuous business. DR allows the rapid recovery of IT operations while cloud backups provide another layer of protection by leveraging a third-party vendor to secure your data in an alternative location. The importance of protecting this data is interconnected to the importance of the overall operations of the business.
4. Ensures protection of assets.
Businesses invest large amounts of time, money and resources into their operations; however, most are lacking a plan to protect this hard work. A SMB Disaster Preparedness Survey by Symantec found that downtime costs small businesses an average of approximately $12,500 per day and medium businesses $23,000 per day. The loss of data translates into a loss of revenue. A backup solution is a cost-effective strategy that ensures your assets are protected.
Because the security of data is imperative, it’s critical that firms choose the right provider to maintain tight control and visibility over business critical information. Eze Castle partners with KeepItSafe, a leading provider for managed online backup and recovery, to deliver our Eze Vault services. Recently, KeepItSafe highlighted the success of a backup and recovery case when a company’s servers crashed, and with it, so too did their records of billing history, accounts receivable and accounts payable. KeepItSafe spotted the crash and proactively restored all of the data that was lost. Shortly after the server failure, the business resumed normal operations. This is an example of a successful case; however, many businesses lacking a backup solution are not so lucky.
Ready to protect your data? Contact Eze Castle Integration to learn more about our Eze Vault services.
Lock Photo Credit to Dennis Skley via Flickr