COCC, formerly known as the Connecticut On-Line Computer Center, is based in Avon, Conn.

As regulation and a greater emphasis on technology lead banks to focus greater attention on internal security measures, banks also are paying greater attention to methods for keeping their businesses running in an emergency. One New England-based third-party technology provider is offering a solution and at least two Massachusetts institutions are using the new service.

Consider this unlucky, and hypothetical, banking scenario: A bank’s customers are in a supermarket buying groceries with their debit cards when word arrives – the main office has burned to the ground. While the staff gathers in the parking lot, customers are flooding the switchboard with questions, checks are being presented against insufficient balances and loan bills are still arriving in the mail.

Business resumption efforts focus on systems, but equally critical recovery components are customer service and back-office operations. A bank needs to be able to answer the phone, process loan payments and return items for insufficient funds following a disaster.

To help banks through the full range of business resumption tasks, data processing service bureaus such as Avon, Conn.-based COCC now offer seats at their disaster recovery centers for financial institutions to help resume their operations following a disaster.

“COCC has offered full disaster recovery services for years,” said F. Scott Johnson, COCC’s vice president of research and systems development. “We have added a business resumption component to assist the financial institution in resuming business if its back office is unusable.”

Currently, COCC has three clients using the service, two of which are based in the Bay State. First County Savings Bank in Stamford, Conn., Winchester-based Winchester Savings Bank and Holyoke-based Holyoke Credit Union are all using the new COCC offering.

“We have several others in the wings,” said Bob Bessel, public relations coordinator at COCC.

Bessel said COCC plans to continue to promote the service to Bay State banks by issuing announcements to current data processing customers, including information in product literature and sending mailings to consultants who specialize in bank operations.

‘Effective Strategy’

According to Johnson, the advantage of co-locating those facilities in the Wallingford, Conn., disaster recovery and business resumption center is enormous, since data communications are already in place and equipment is available to process banking transactions. At COCC’s business resumption center, Johnson noted, banks can easily retrieve information such as unposted items and make pay/no pay decisions, balance automated clearinghouse and foreign ATM activity, and respond to customer queries as if the bank were fully operational. Technicians are available to activate and maintain communications with the appropriate systems.

“These basic banking activities maintain the bank’s stability [to conduct business] as well as preserve the public’s faith in the institution,” said Johnson. “Being able to honor checks, receive loan payments and resolve debit card and home-banking disputes is key to retaining the customer, so that when the bank is fully restored and operational, its customers will remain.

“With COCC’s facilities for account, ATM and debit card processing, the technology side of business resumption is in place. The final customer service and back-office components complete the business resumption picture to ensure the long-term survival of the bank.”

COCC, formerly known as the Connecticut On-Line Computer Center, now offers the customer service and back-room recovery features of its business resumption services to any financial institution. Recovery of check, core and ATM processing is restricted to current COCC clients.

“Disasters take many forms,” Johnson added. “If a disaster hits a bank such that they cannot conduct business from their primary location, then they will need to relocate certain critical departments. This is a highly effective strategy for restoring bank functionality in a disaster situation.”

Peter Rugen, vice president and director of information technology at Stamford-based First County Savings, said that bank leases space in the same facility at Tower Drive in Wallingford in order to be next to COCC.

“Some people have misconceptions as to how this happens. COCC, who is our core processor, uses the [disaster recovery] facility for their mainframe computer, and their client server operation is duplicated there as well,” said Rugen. “We have an independent requirement to duplicate our own internal processor. We had used alternate branches of the bank in the past, but that became a less and less viable option. We wanted to get dedicated space to replicate our back office, and what made sense was to co-locate there with COCC because they’re there.”

Currently, First County Savings could be up and running from the Wallingford site within 24 hours, and Rugen plans to better that response time. The site itself is a large computer room with a raised floor and 40 seats from which First County could access the full breadth of their operation.

“Twenty-four hours is to get working data up and recovered from tape. Truthfully, I think we could do it faster right now, and eventually I’d like to get it down to a couple of hours,” he said. “I have a live file server there that I can see and transfer data to dynamically in real time. Wallingford is a warm site, and will technically never be a truly hot site, but we’re moving closely that direction.”

A “hot site,” Rugen explained, means that the bank could switch operations over to Wallingford instantly, with no gaps in service.

While First County Savings doesn’t run drills, it does periodically test the integrity of the data and is on a schedule to run some key applications from Wallingford.

Bessel said the business resumption center is a physical space that is open to subscribing banks so that they have a temporary base of operations in the event their physical plant is unavailable.

“If something happens to a bank, they’ve got a place to go so that they can set up shop,” said Bessel. “It could be a flood, a power outage for a couple of days, the branch could catch on fire. If anything like that happens, the bank can go down to this facility in Wallingford and get back to work.”

A bank’s phone lines can be transferred to the facility, and computer systems can be routed as well so that bank officers can have access to accounts and monitor customer activity.

“Essentially, they’re back in business,” said Bessel. “They may not have a physical presence in their market area, or some place to walk in and cash a check, but customers can go to the ATM or use their debit card.”

Bessel said having everything in the same building is a key to make everything work smoothly.

“The advantage of our service, as opposed to others, is that we’re in the building – so it’s easier for our client banks,” he said.

As for how much marketing is involved in such a product, Bessel said that COCC doesn’t necessarily have to campaign too hard.

“The pressure for this kind of thing isn’t coming from a sales effort; it’s coming from regulators,” he said. “We’re all more aware that things can happen after [the 2001 terrorist attacks on ] Sept. 11, so there is a far greater emphasis on backup facilities of all kinds. But now the regulators are going further and asking ‘what happens to the business?’ So they’re forcing a lot of these changes through regulatory exams.”

“I think that right now, there’s no question that banks are a regulated industry,” said Rugen. “This isn’t just good business sense, it’s a regulatory imperative. What a viable solution is, and how complex your business resumption services need to be, is a function of how large institution is.”

Branches functioning as backup sites may be viable for smaller banks, he said, but not for a bank the size of First County Savings.