Enhance Your DR Plan: Key Testing Strategies

Disaster recovery (DR) planning is fundamental to maintaining operational resilience within financial institutions. It ensures that essential functions can be restored rapidly following a disruptive event, minimizing operational interruptions and financial losses.

DR Testing helps organizations understand how well their Disaster Recovery plan would work if an actual disaster were to occur. Here are some essential guidelines for conducting effective disaster recovery testing.

Exercise vs Test

Both exercises and tests are crucial for validating procedures in your Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) plan, but they serve different purposes:

• Exercise: A procedure designed to validate one or more aspects of your BCP or DRP. A common exercise is a structured walk-through (“table-top”) where stakeholders go through each step and component outlined in the plan. This guarantees that everyone involved is aware of their responsibilities during an emergency. It can also help uncover inconsistencies, missing information, or errors in the plan.
• Test: A form of exercise that measures the performance or reliability of your system resilience in a simulated environment. For example, simulating the recovery of your communication lines, servers, and applications is a DR test.

The Cost of Downtime

Financial institutions should be acutely aware of the high costs associated with downtime. According to Emerson Network Power, the average cost of data center downtime across industries increased a staggering 41 percent since 2010. Furthermore, CA Technologies reports that financial institutions face an average annual revenue loss of $224,000 due to downtime. These costs may vary according to institution size, but the key takeaway is that any amount of downtime can lead to lost revenue. This underscores the importance of rigorous and regular disaster recovery testing.

FFIEC Guidelines

The Federal Financial Institutions Examination Council (FFIEC) provides clear guidance on disaster recovery tests and objectives. The council states, “Management uses tests to determine whether system resilience conforms to the BCP and stated recovery objectives.” Here are three critical metrics to consider:

• Recovery Point Objective (RPO): The most recent backup you can safely retrieve following a disruptive event.
• Recovery Time Objective (RTO): The minimum time necessary to restore your services after a disruption.
• Maximum Tolerable Downtime (MTD): The longest duration your institution can afford to be down before its future is at risk.

FFIEC expects institutions not only to define but also to test these recovery objectives. If a recovery objective falls short during testing, it should be reevaluated and adjusted accordingly.

A Comprehensive Checklist

Disaster recovery testing is essential for minimizing downtime during adverse situations. However, these tests are only as effective as the practices behind them. It’s crucial to follow a consistent and thorough testing process that includes:

• Critical Business Functions: Confirm that systems can support vital business processes in an emergency, including alternative site transfers, increased workloads, manual workarounds, and communication timelines.
• Technological Integration: Integrate technologies that support essential business activities, such as data replication, recovery, and off-site storage.
• Backup Data Testing: Regularly test backup data integrity and availability.

Post-testing Evaluation

During testing, if a recovery objective does not align with actual capabilities, you should always reevaluate that particular objective. It’s also important to consider dependencies within processes. For instance, some processes with shorter RTOs, such as lending processes, may hinge on those with longer RTOs, like the lending server’s restoration time. It is also important to remember that the evaluation of the DR tests is not only to determine whether the plan is appropriate for current needs but anticipated future needs, too.

Managed DR Testing

For many institutions, outsourcing disaster recovery testing to experts like Safe Systems can streamline the process, ensuring compliance with industry standards and focusing internal resources on core business operations.

Disaster recovery testing is more than a regulatory requirement-it is a vital practice to ensure the continuous operation and financial well-being of your institution

By following these guidelines and leveraging expert services, you can ensure that your organization is prepared to respond to any disruptive event.

To equip your team with an outline of these essential testing strategies, download our infographic: Guidelines for Disaster Recovery Testing” infographic today