NEW YORK (MarketWatch) — As Hurricane Sandy neared the East Coast on Monday, New York’s financial markets said they would remain closed for Tuesday. But the question now is how soon they’ll get going again.
The New York Stock Exchange (US:NYX) said it hopes to reopen on Wednesday, the last day of the month, “conditions permitting.” With coastal surges battering lower Manhattan, it’s not just a question of the storm passing, but firms being able to recover as quickly as possible.
While it’s expected that financial markets will be largely up and running by Wednesday, it's worth thinking about the challenge facing the financial industry in the wake of the storm. After battening down to deal with one of the largest Atlantic storms in history, clients will demand the industry’s computer systems, financial data and trading platforms all start working almost immediately after the weather system passes, with barely a glitch.
Wall Street today is in better shape to deal with a challenge of such magnitude than it once would have been. Read the Financial Industry Regulatory Authority’s web page for Hurricane Sandy updates.
The crises that have hit New York in the past decade-plus — from the attacks of September 11, 2001, to a major blackout in 2003 and Hurricane Irene last year — have left firms more prepared to face worst-case scenarios.
After those crises, disaster recovery plans were dusted off and reassessed, said Dave Sarabacha, global leader for resiliency at Deloitte, who works in business continuity.
“They recognized that a trilateral solution is best, which includes high availability locally, a regional alternative data center — say 50 miles apart, but commutable — and an out-of-region capability to address events such as those happening now,” he said.
One of the biggest lessons for the financial community after 9/11 was the importance of strategically locating back-up servers miles from the headquarters.
Before 9/11, many firms had data centers based only a few miles from Wall Street, in New Jersey or Long Island. Others, like Nasdaq OMX Group Inc. (US:NDAQ) , had backed up their computer systems out of state, said Rodney Nelsestuen, a senior research director with CEB TowerGroup consulting firm.
A spokesman for the NYSE told MarketWatch that its Manhattan offices had back-up power generators at the top of the building, and its primary servers are located in Mahwah, N.J., roughly 30 miles away.
Of course, much of Wall Street these days is populated by global firms, and that scale comes in handy at moments of local disruption.
The growth of cloud storage — remotely storing even the most basic documents — means that localized servers aren’t as essential as they once were. As Sarabacha said, cloud storage “removes or at least greatly reduces the impacts of an isolated or even regional event.”
