You’ve probably seen the terms recovery time objective and recovery point objective in your financial institution’s (FI) disaster recovery plan (DCR), but have they been updated? If an incident occurred today, would you be ready to act quickly?
While recovery time objective (RTO) and recovery point objective (RPO) are related to business continuity — or an FI’s approach to and process of continuing to deliver essential products and services post-incident — they focus on different aspects of incident recovery.
Let’s examine the key differences between RTO and RPO, some examples of each, how to incorporate these metrics into your FI’s disaster recovery plan, and how you can use business continuity software to stay ahead of crises and ensure your systems operate seamlessly.
Related: What is Business Continuity or Financial Institutions?
Table of Contents
- What is an RTO?
- What is an RPO?
- RTO vs. RPO: Key differences
- Incorporating RTOs and RPOs in disaster recovery
- Why RTOs and RPOs matter in business continuity
- Exploring the roles of RTOs and RPOs (Example)
- Improving business continuity with BCM software
What is an RTO?
RTO is the time goal for restoring systems, applications, and business functions after an incident, such as a natural disaster or system outage. In short, RTO is the time limit for an FI to resume normal operations to avoid further issues.
RTO is measured in seconds, hours, or days and depends on the downtime costs, which vary based on immediate and long-term effects. For example, suppose a bank experiences a system failure, and its RTO is two hours. In that case, it must restore access to customer accounts and transaction services within two hours to avoid significant financial or regulatory damage.
Once an RTO is established, businesses can choose appropriate disaster recovery solutions, like external hard drives for short RTOs (around an hour) or offsite storage for longer RTOs (up to five days).
What is an RPO?
RPO defines the point in time at which data must be recovered from backup storage after a network failure so operations can resume. In short, RPO measures how much data your FI can afford to lose before reaping consequences.
RPO is measured backward in time and can be specified in seconds, minutes, hours, or days. For instance, if an FI experiences an outage, its RPO might be set at 30 minutes, meaning that it can afford to lose no more than 30 minutes of transaction data in the event of failure. Depending on the RPO duration, backup solutions such as external hard drives or tape drives may be suitable.
RTOs vs. RPOs: Key differences
Ultimately, the goal of the RTO is to minimize downtime post-incident, while the RPO aims to reduce data loss. The consequences of not establishing or following objectives like RTO and RPO often overlap, leading to potential transaction, operational, compliance, and reputational risks.
The key differences between RTOs and RPOs at a financial institution
Incorporating RTOs and RPOs in disaster recovery
RTOs and RPOs are essential components of a disaster recovery (DR) plan, which plays a more significant role in an FI’s business continuity and risk management approach. The DR plan typically includes key metrics, including RPOs and RTOs, which are outlined in the business impact analysis (BIA).
A BIA evaluates and analyzes the potential effects of an interruption in a business operation. The information then strengthens the FI’s larger risk management strategy. BIAs also help ensure effective business continuity management (BCM) by identifying critical functions, analyzing interdependencies between departments and processes, and assessing organizational impacts.
Developing a BIA—which include RTOs, RPOs, and other metrics—is an integral part of the BCM lifecycle.
Related: Disaster Recovery Planning for Banks & Credit Unions
Why RTOs and RPOs matter in business continuity
RTOs and RPOs serve as key risk indicators that assess potential risks affecting the effectiveness of a business continuity plan.
RTOs address the question, "How quickly must systems and services be restored to prevent significant negative impacts on the business?" In contrast, RPOs answer, "Up to what point in time can we recover data after a disruption?"
The impact of missing RTOs
Time is of the essence when an incident occurs.
In January 2025, Capital One experienced a vendor outage that prevented its customers from accessing their paychecks, seeing their bank account balances, or logging in online for days. While the FI had to deal with angry customers in the short term and potential regulatory consequences in the long term, the incident begs the question: What could the FI have done differently to resume operations more quickly?
This misstep from a banking juggernaut underscores the importance of disaster recovery and, specifically, the role of RTOs in setting clear guidelines for systems recovery. By establishing RTOs, FIs can prioritize the most critical systems and services and ensure they act within the time threshold to avoid significant consequences.
The impact of missing RPOs
Your FI handles a lot of data; if any of that information is lost or unavailable for a significant amount of time, the results can be catastrophic.
In one of the most significant data breaches in recent years, Equifax, an American credit bureau, reported a breach involving the private financial data of more than 145 million Americans. As part of the Senate’s investigation into the matter, it discovered a series of issues, including its patch management system which employed an “honor system” approach to addressing its backlog of over 8,500 known unpatched vulnerabilities—1,000 of which were cited as critical, high, or medium risks. In other words, Equifax disregarded its protocol requiring patches to be made within the RPO of 48 hours, leaving its customers’ data open to malicious activity.
This debacle illustrates the importance of following RPOs. Suppose Equifax had established solid policies and procedures, including RPOs, for addressing data breaches and cyber-related incidents and held its team members accountable for following them. In that case, many of the risks the breach brought, from operational risk to reputation loss, might have been mitigated.
Exploring the roles of RTOs and RPOs (Example)
Now that we’ve discussed the impact of RTOs and RPOs, let’s explore the roles of RTOs and RPOs in more detail.
Imagine your FI experiences a ransomware attack, and as a result, one of your main online systems is now inaccessible to customers. Your IT team has identified the attack and has begun work to address the issue.
The RTO for this service is 4 hours. Within this time your FI must restore the system and make it operational. To make this happen, your team will follow the action steps previously established in your incident response plan:
- Isolating the affected servers
- Establishing backup servers and systems as part of the continuity process to restore access to the service
- Communicate the issue to stakeholders, including customers. If available, include alternative ways to access the service, such as mobile apps or phone support.
The RPO might be one hour for the same incident, which means your FI can afford to lose only 60 minutes of transaction data.
To meet this RPO, your FI would:
- Regularly back up data on a specified schedule (e.g., every 30 minutes) in case of an attack or incident
- Work to restore the most recent backup (e.g., 1 hour before the attack occurred)
- Perform data integrity checks to ensure any lost transactions are recovered or manually handled
Using an RTO and RPO (as well as other established incident response policies and procedures), your FI can rest assured that you’re doing everything possible to minimize system downtime, reduce data loss, help maintain business continuity, continually serve your customers, and comply with regulatory expectations.
Improving business continuity with BCM software
While RTOs and RPOs play an important role in BCM, identifying and analyzing data and risk analyses to identify this information, as well as other key metrics and risk assessment areas, can be cumbersome.
That’s where business continuity software can help. The right BCM software can streamline the data gathering and risk assessment process, redefining your business continuity planning. With custom reporting, you can empower your recovery teams with instant access to crucial data — including your RPOs and RTOs.
Related: 8 Features to Look for in a Business Continuity Solution
Want to learn more strategies for assessing and mitigating operational risk?
Learn more in our Ultimate Business Continuity Q&A webinar.
