Disaster Recovery Service Fills Gap for Small Banks

A computer maintenance company has started to market a disaster recovery service to some New York banks that had previously been hard-pressed to find adequate, reasonably priced backup arrangements.

The company, US Computer Maintenance Inc., based in Bellmore, N.Y., recently signed the New York office of the United Bank of Kuwait as its first disaster recovery customer. Other banks are evaluating the service.

To date, many community banks and branches of foreign institutions have relied on high-priced backup services from their equipment manufacturers or on reciprocal arrangements with other banks.

Power Is a Problem

The banks want to guard against not only major disasters such as utility company power outages, but also brownouts and power surges in the buildings themselves. Bankers said the older buildings in the Wall Street area are particularly prone to these problems.

"We're gearing ourselves up to help smaller banks with smaller systems," said Steve Davies, president of US Computer. The company provides maintenance for Digital Equipment Corp. and Sun Microsystems hardware for about 30% less than the manufacturers charge, according to customers, including National Westminster Bank and Greenpoint Savings Bank.

Unhappy over Arrangements

According to bankers, disaster recovery arrangements with other banks can be problematic. They say that when the time comes for the banker to test the system, the partner bank often does not have the time or resources available to accommodate the test.

The Kuwaiti branch in New York, which has $2.7 billion in assets, was dissatisfied with the reciprocal arrangements it had with other foreign-based banks.

With one of these banks, "we made an arrangement to test, and two days before it was scheduled to begin, the bank called us and said we couldn't come in," said Jose Corporan, operations officer of the United Bank of Kuwait in New York. Such tests can last anywhere from six to 24 hours.

"When they finally let us in to test, they told us they didn't have anyone to stay and work with us," Mr. Corporan said. "Two hours into the test, we were shoved out."

Vendor Not Available

The bank also had difficulty finding a vendor who would provide the service. A vendor recommended by the bank's hardware supplier did not work out. "When they saw we had a small system, they weren't interested," said Mr. Corporan. "No other vendor approached us."

Other banks, including the New York office of $15 billion-asset Christiana Bank, based in Oslo, Norway, are evaluating the service.

Christiana now uses a hot site provided by Digital Equipment Corp., but the vendor has not been responsive, said Angelo Blas, data processing manager at Christiana Bank.

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