Importance of Data for Financial Institutions
- by James Walsh
- Published on 10/4/07
- Article views: 162
This episode highlights the importance of data to financial institutions. Employees risk their life to save it! Why is data so important to financial institutions?
Disastrous Consequences of Data Loss to Financial Institutions
Every business organisation suffers heavy losses with lost data. However, the impact of lost data is felt the maximum on banks, insurance agencies, brokerages and other organisations in the financial sector. In fact, every enterprise that deals with public money suffers heavily in the absence of data in comparison to enterprises of the non financial sector.
The loss induced by lost data is two fold. Value of the loss is estimated by calculating the potential business loss in the absence of data. Even the cost of reconstructing data is included. Data reconstruction becomes expensive if it has to be reconstructed by highly skilled and technical personnel. If low paid data entry operators were to perform the job, the data reconstruction costs would be low. Therefore when organisations lose non technical data like customer information, they are not much perturbed. Such data can easily be re entered from the back up media. However, similar loss of client information in a bank proves disastrous. For, every hour without customer information translates to lost business opportunity. Potential income is lost by the suspension of financial transactions.
Further, financial institutions accrue additional expenses on customer notification. Sending out notification to customers requires many man hours of work and this amounts to lost productivity. The same manpower could otherwise be used for productive endeavour.
Data loss could thus prove disastrous for institutions that deal with finances. Therefore, every valuable data is protected with a back up. Unfortunately, it has often been proved that data cannot be always retrieved from back up media. Either the data is not kept regularly updated or the back up storage device fails when the need arises. At such times, the only remaining option is, approaching data recovery service providers. They can help retrieve the lost data.
Cost of Recovering Lost Data
Lost data is usually recovered successfully by the professional data recovery experts. However, the time taken for data retrieval might range between 3 to 7 days. The nature and extent of damage to the hard disk and the availability of spare parts determine the time taken. If replacement is not possible, the damaged parts have to be laboriously repaired in a time consuming process.
The loss entailed by the financial institutions is directly related to the time taken for data recovery. This sector loses millions of pounds for every unproductive work hour. Undoubtedly, such losses get reflected in the balance sheet of the institutions. If I were to be a bank manager, I would protect my organisation by being prepared with a disaster recovery plan. I would practically test the workability of the plan and by implementing on the problem areas.
Disaster Recovery Plan
A good disaster recovery plan would ensure that the bank will bounce back without much inconvenience or loss to all concerned. Emergency preparation would be a routine job for the disaster recovery team that would have been specially formulated. This group will be regularly trained to detect emergencies, for early detection prevents widespread damage. Methods of communicating an emergency would be pre worked out. All the equipment that is valuable would be identified and placed in strategic locations. This placement would help their easy transportation out of the building in times of need. An off site location would be kept identified and ready. If disaster strikes, bank operations can resume functioning using the relocated equipment from the new site.
Even the customers would be advised to maintain detailed records of the financial transactions they make. This would ensure peace of mind to them, till data retrieval takes place. This precaution is necessary. For, the economic implications of data loss negatively affect both the companies and their clients.
James Walsh is a freelance writer and copy editor. If you are concerned about data loss and would like more information on Data Recovery see http://www.fields-data-recovery.co.uk
James Walsh is a freelance writer and copy editor. For more information on Data Recovery see http://www.fields-data-recovery.co.uk
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