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As part of a highly regulated industry, financial services companies are subject to stringent regulatory requirements for disaster recovery. In Cutover’s second annual IT disaster recovery survey, financial companies demonstrate notable trends in disaster recovery. Most express the need to invest in automation and enthusiasm for AI in disaster recovery, but they also exhibit caution, particularly around cost, compliance, and skills.
This article analyzes the financial services responses in the survey including impacts on IT disaster recovery teams, and how automated disaster recovery solutions can help.
Cloud Disaster Recovery Strategies in Financial Services
Compared to other sectors, more financial services firms (66%) are likely to use multi-site active/active architectures for mission-critical (Tier 1) applications in the cloud. Additionally, financial services are far more likely to use a warm standby strategy for business critical applications (Tier 2) with at least a 14 percentage point increase over other sectors.
And, when asked about recovery time objectives (RTOs) for mission critical applications, more financial institutions have an RTO of one-hour or less. Compared to 50% when looking at all industries, financial services are 12 percentage points more likely to have a 1-hour or less RTO.
Considering that financial services are highly regulated for resilience and disaster recovery procedures, it’s not surprising that they aim to and report on achieving lower RTOs than the average industries.
The Impact of Increasing Regulations on IT DR
Despite being a highly regulated industry, financial institutions were not more likely to be impacted by the increasing regulations on resilience and DR processes. Similar to other sectors, approximately one-third or more of financial respondents cited the impacts of regulation on DR. This underscores the need for strong financial services disaster recovery plans that ensure compliance and resilience. Financial institutions responded:
- We are more thoroughly evaluating our IT partners/vendors
- More consideration about what types of applications we put in the cloud
- More strategic focus on disaster recovery
- Increase focus on third party risk management
- We are conducting more scenario testing
- Increased investment in disaster recovery
- Increased focus on crisis communication
Readiness for the Digital Operational Resilience Act (DORA)
Then, we asked if the financial companies were ready to meet the upcoming DORA European regulation deadline. On the positive side, more than half of the financial services enterprises, or 56%, responded that they were ready to meet the upcoming deadline for the DORA regulation.
However, an additional 40% replied that they are looking at DORA law now. The remaining responses were split between not having started yet (2%) and not seeing this as relevant to us (2%).
Given that this questionnaire surveyed companies approximately 6 months before the January 17, 2025 deadline, the 40% that were looking into DORA requirements now may have been late in their preparation.
The Role of Automation in Financial Services IT DR
The majority, or 90%, of financial services organizations recognize the need to increase investment in disaster recovery automation. This strong demand highlights how critical financial services disaster recovery has become, especially as firms aim to maintain continuity, compliance, and customer trust in an increasingly digital landscape.This is similar to respondents in other industries, with the following notable differences:
- 13 percentage point increase compared to government/public sector
- 10 percentage point increase compared to healthcare sector
- 10 percentage point increase compared to technology sector
We also asked enterprises which elements of disaster recovery are currently automated, or are planned for future automation, as part of their evolving IT DR strategies.
Automation of disaster recovery elements
Every company has their own unique automation journey for disaster recovery, and it needs to fit into their larger automation strategy. When we asked financial services which of DR have they already automated or plan to automate, here are the findings:
- 54% already automated communication/collaboration
- 44% already automated manual, repetitive tasks
- 34% already automated the integration with other systems in the tech stack (CMDB, ITSM, IaC, etc.)
- 40% already automated post-event reporting and regulatory audit logs
While more than half of financial companies already automated communication/collaboration (such as Slack, Microsoft Teams, etc.), an additional 30% plan to automate in the next 12 months. Furthermore, 46% of financial companies plan to automate manual, repetitive tasks in the next 12 months. And, nearly one-third plan to automate ‘integration with other systems in the tech stack’ and post-event reporting in the next 12 months.
Despite the increasing regulatory pressures, financial services disaster recovery strategies are evolving at a pace comparable to other industries. These firms are prioritizing automation not only to boost efficiency but also to strengthen resilience and meet compliance demands more effectively.
Automate disaster recovery with technology tools
Overall, financial services companies responded similarly to the other industries in their use of technology tools during a disaster recovery. The question included tools from the technology recovery stack: ITSM platform/CBDB, BCM platform, communications platform, Infrastructure as code (IaC) tools, and monitoring tools.
The one outlier is IaC tools. Compared to most other industries surveyed, financial services companies are more likely to currently use IaC tools. Specifically, compared to the energy and utilities sector, financial companies have a 19 percentage point increase. And, compared to the government/public sector, they have a 17 percentage point increase.
IaC, or scripting, tools automate provisioning and configuration of infrastructure to accelerate application recovery and minimize downtime. It’s unsurprising that financial services companies, which are subject to stringent regulatory requirements, invest more heavily in IaC tools.
Benefits and best-in-class disaster recovery automation
Similar to other sectors, financial services companies think there are a wide array of benefits by incorporating automation into DR processes. When it comes to financial services disaster recovery, the top three for financial services include:
- Ensuring regulatory compliance
- Improved IT staff productivity
- Improved efficiency and profitability
With the exception of the Technology sector, financial companies are at least 12 percentage points more likely to cite ‘ensuring regulatory compliance’ as the biggest benefit to DR automation.
On the other hand, only 22% of financial respondents believe ‘strengthened recovery posture’ is the biggest benefit while 43% of manufacturing respondents and 36% of healthcare respondents selected it.
When it comes to determining characteristics for best in class automation, 48% of financial companies consider ‘education for IT and cloud resilience stakeholders’ as the top most important characteristic. Regular testing and exercising DR plans, an end-to-end focus, and integrated, unified solution all tied for the second most important characteristic with 40% of financial responses.
This survey reiterates the importance of both disaster recovery regulatory compliance and increasing efficiency and productivity.
Excitement Around AI, But Caution Remains
The majority of financial services entities are excited about how AI will transform disaster recovery plans, specifically:
- 76% are excited about the opportunities that AI will bring
- 76% believe AI will transform the execution of disaster recovery plans
- 90% believe AI will transform the design of disaster recovery plans
When we dive into the ways AI is expected to impact disaster recovery processes in the next 2-3 years, financial services anticipate many benefits. The top three benefits include:
- Analyze disaster recovery post-event metrics to suggest improvements to the plan
- Help create disaster recovery templates/plans/runbooks from data sources
- Provide better predictive analytics for early warning systems
In comparison, more respondents in the Energy/Utilities and Manufacturing/Industrial sector expected the creation of templates/plans to impact disaster recovery.
However, despite the anticipation of benefits, financial respondents cited multiple considerations about incorporating AI into disaster recovery processes. The top three considerations include cost implications, compliance considerations, and the lack of AI skills internally and how best to build or buy these.
Cutover AI-powered and automated runbooks for disaster recovery
The automation and AI journey in disaster recovery will be unique for every organization. It’s important to outline your goals and strategies and consider the impact on people, processes and of course, budgets.
Cutover works with financial companies worldwide to reduce costs and downtime and increase efficiency with our runbook automation and AI-powered runbooks. Whether you're just beginning or enhancing your financial services disaster recovery strategy, Cutover can help streamline operations and accelerate outcomes.
Book a demo or learn more about Cutover Recover and start on your way to recovering 50% faster, today.