Integrating IT into Banking

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With all financial institutions come multiple challenges. Loan growths, everyday regulation compliances, and the demand for new services have created an environment where financial institutions are finding cloud computing more important than ever to stay successfully competitive. So how do they approach IT? First off, financial institutions find the world of IT to be expensive, complicated, overwhelming and distracted. Bankers are wanting to be bankers, not server managers. For the everyday banking establishment, when there is a need for a new service, the first course of action is to buy additional equipment and then hire more personnel to manage said equipment. With the adoption of a cloud suite, banking infrastructures do not need to add more equipment or personnel. By taking advantage of the technology that is more secure and scalable, cost efficiency is accomplished. The costs that it would require to build, manage, and maintain on-site systems are eliminated. As services within the cloud suite expand or shrink, the resources can be shut on or off accordingly to reduce capital expenditures. Banking can be the primary focus instead of the IT infrastructure behind it. The cloud infrastructure includes the advantage of 24/7 monitoring and management by experts in all areas regarding banking technology. The most important advantage from banking within a cloud suite is the security from a disaster resistant data center and failover. All the data will be safe and secure, available at all times when needed.

In the United States, a major banking institution called Wells Fargo recently experienced an outage of all their banking systems. In a tweet, Wells Fargo announced that power had been shut down at one of their facilities due to the detection of smoke after a routine maintenance check. The corporation further apologized via social media for outages with online banking and mobile app banking. Interestingly enough, Wells Fargo’s outage was far more extensive than what they let on. Wire transfers could not be processed; phone calls to the bank were not even able to be put through. The entire Wells Fargo system was basically crippled. It appeared like the bank was a dead business. When the outage had first occurred, their failovers did not work as they expected. This $225 billion company was easily brought down by a fire alarm going off in a single data center.

What Did Wells Fargo Do Wrong?

Being the fourth largest bank in the United States, Wells Fargo failed to prepare an infrastructure that would withstand a disaster resulting in downtime. In the case that a physical location were to be damaged or disrupted, the well-known financial institution did not suitably back up their mission-critical workflows. As a result, when its systems began to shut down, the scramble to backup servers was slow and uncoordinated. In the midst of the shutdown, Wells Fargo’s IT team were unable to devise and execute a plan to remedy the problem. Scrambling to remedy the situation, the bank attempted to reroute critical data, causing errors with mobile, online and ATM banking. All the issues combined, Wells Fargo consequently suffered from a downtime of almost an entire business day. When it came time to publicly communicate what had happened, Wells Fargo flopped. Not only did they not clearly state the cause of the issue, but they also were vague in the resolution time. This was another hit to consumer confidence.

What Lessons Can Be Learned?

Although what happened was unfortunate for Wells Fargo and their consumers, a learning opportunity can be taken away from this outage. Seeing where Wells Fargo fell short, other corporations can do better by prioritizing IT resilience. The first step would be to create a disaster recovery environment that would be able to support an immediate recovery of critical assets. To maintain time and cost efficiency, third party providers for disaster recovery (DR) automation and cloud backup should be considered. While creating a DR plan, it is even more important to test it through plausible scenarios. Preparing your enterprise for a disaster is one thing, but if one were to ensue, communication is vital. To maintain consumer relations, do not do what Wells Fargo did. There should be transparent communication of the incident and the response plan. With what Wells Fargo inadvertently taught everyone, enterprises should now be better equipped in the case of a disruption or disaster.