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New York, New Jersey financial sector well prepared for Hurricane Sandy

Lucas Mearian | Oct. 29, 2012
Lessons from 9/11 have helped ensure the financial services sector in New York and New Jersey is prepared for disasters, and even shorted the time to recover when regional events happen.

The financial services sector in New York City and New Jersey are dusting off disaster recovery plans and bracing for a storm that could bring 80 m.p.h.-plus winds and major flooding.

Hurricane Sandy could not have been hyped more by weather tracking services. Some are predicting "the storm of the century." Others, such as Henry Margusity, a senior meteorologist with AccuWeather, said the storm could bring a "disaster of biblical proportions."

But analysts and industry experts agree, New York and New Jersey aren't pushovers when it comes to potential disasters -- particularly their financial services business sectors. The lessons from the terrorist attacks on 9/11 were not lost on them, according to Kevin Knox, a research director with research firm Gartner.

"I think after 9/11 in particular, there was notice taken to how close a lot of the data centers were. Since 9/11, we've seen a lot of work to separate the data centers to ensure a regional disaster wouldn't potentially take out multiple data centers," Knox said.

The New York Stock Exchange is currently working with New York City officials to assess the readiness of safety, power, water and transportations systems.

"At this time all U.S.-based NYSE Euronext Exchnages plan to operate on a normal business schedule on Monday, Oct. 29 and on the days following," said NYSE spokesman Eric Ryan.

IT systems over the past decade have become more hardened in terms of recovery time and recovery point objectives (RTOs and RPOs), or the time it takes to get systems back on line and minimizing the amount of data lost during that time. Over the past decade, RTOs have dropped from 48 hours to four or five hours in many cases, he said.

"The finance guys are probably some of the most aggressive as far as having disaster recovery capabilities, both in how quickly they can recover as well as ensuring they're mitigating risk," he added.

In many case, banks and brokerages will have two data centers in relatively close proximity -- 20 or 30 miles apart -- for business continuity where they replicate data in real time between the two to ensure if one goes down, the other can still operate. Then, they'll have a third disaster recovery site to ensure a regional disaster will still not cripple their operations, Knox said.

Knox said virtualization has had a lot to do with better RPOs and RTOs with regard to x86 server infrastructures in larger companies, and for small- to medium-sized businesses, SaaS cloud services have allowed for better disaster recovery planning than at any time in history.

"Are there going to be companies where things do happen? Of course, if a huge regional disaster occurs. Relatively speaking they're pretty well prepared," Knox said.


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