Planning for Disaster

Think about it.

Your brokerage has just been destroyed by a massive fire. What once resembled your office space has been reduced to ashes and soot. The first concern always has to be that all employees have made it out unscathed, but then your attention turns to trying to put your brokerage back together. Where do you start?

A number of natural and unnatural disasters in the past few years have clearly demonstrated that these things do indeed happen and it is important to be prepared. That’s where a disaster recovery plan (DRP) comes into play. A DRP is a documented process or set of procedures to protect the businesses’ critical Information Technology systems in the event of an unforeseen disaster. Here are some tips to help make sure your brokerage is ready with a DRP should the unthinkable occur.

Have a Plan

Any brokerage, no matter how big or small, needs a disaster recovery plan in place well before anything disastrous happens. While network servers and data storage may be foreign to many industry professionals, there is a solution. For brokerages that don’t know the first thing about developing a DRP, there are many DRP templates available online. Then, it is simply a matter of finding the one that best suits your brokerage.

Size Matters

The size of your brokerage will, to some extent, dictate the specifics of your DRP.

For a larger brokerage, an off-site data centre or branch office should be considered. This strategy allows the brokerage to backup critical records to an off-site location. Each individual brokerage should determine what their recovery point objective (RPO) is. “RPO” is a time metric. RPO is the maximum amount of time for acceptable data loss for an IT service. The more backup jobs in place, the lower the RPO and less data is lost. For instance, a larger brokerage that goes through many transactions in a day could back up their servers every four hours or so. The RPO in that case would be 4 hours.

For smaller brokerages that may have a less sophisticated DRP, it is still important to have some stop-gap measures in place. The most important thing for a smaller brokerage is to avoid the temptation to house all electronic records on-site. Even a smaller brokerage should have a method to back-up business-critical data in a location well away from their office space. There are many providers of solutions and there are software services via the Internet that act solely as private data storage. These may be appropriate options for a smaller brokerage.

Test, Test, and Test Some More

Of course, simply having a DRP isn’t enough. One of the biggest mistakes a brokerage could make would be to not go through a dry run of what would – or will – happen after disaster strikes. If you have a DRP but do not put it through a test phase, you may as well not have any plan. Testing your disaster plan will ensure that all of your back-up measures are accessible and working as they should. Furthermore, a brokerage should test their back-up systems quarterly to ensure everything continues to work as planned.

While planning for the worst is never an enjoyable exercise, it is necessary. If the unthinkable were to happen, having a plan already in place makes it that much easier to get back up and running again.

Does your brokerage have a DRP in place?

Here is a checklist to help you plan: Disaster Recover Plan Review Checklist