Pub. 17 2020 Issue 1

Issue 1 • 2020 13 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S CORONAVIRUS CONTINGENCY PLANS By Jay Kenney, SVP, Regional Manager, PCBB S ince the World Health Organi- zation declared the coronavi- rus a pandemic, it is definitely a good time for community banks to review their business continuity plans and ensure pandem- ic planning is included. Traditional business continuity plans could be less effective if they don't incorporate the risk of widespread illnesses. To help, the Federal Financial Insti- tutions Examination Council (FFIEC) just updated its 2007 guidance. Re - viewed with your current business continuity plan, this document should help you fill in any gaps, to ensure your institution is prepared. Several factors dictate specialized planning for a pandemic, according to the interagency guidance. A tradition- al business continuity plan typically prepares for various types of natural disasters, such as floods or wildfires, or human-made disasters such as terrorist attacks. While such disasters can vary in severity, most cause only short-term disruption or are limited in scope, in rela- tion to a community bank’s market area. As such, traditional plans typically call for the use of mobile branch buses or remote locations to serve as alternative places for back-office activities. But in the case of a pandemic, all locations could be impacted and employees everywhere could be subjected to the illness — and conditions could last for a longer period than the impacts from some disasters. Moreover, pandemics often come in waves. After a summer respite, the coro- navirus could come roaring back and cause more illness, potentially impacting an institution's operations. To minimize the threat of illness among an institution's workforce, community banks should monitor local outbreak conditions to determine when to direct employees to work from home, if their work can be handled remotely. Employees should also be cross-trained for key business positions and processes. In extreme cases, institutions might need to dictate quarantines in some areas, redirecting customers to online banking, mobile banking, ATMs and call centers (ideally routed to employees' quarantined locations, if possible). For now, community banks should take preventive measures to reduce the likelihood that the coronavirus would significantly impact their operations. One of the things that are at the top of the list: educating employees about min- imizing the threat of illness, including appropriate hygiene training and tools. Community banks should also coordi- nate now with critical service providers and suppliers to lessen potential disrup- tive impacts. Now that the coronavirus is offi - cially a pandemic, it's smarter not to be penny-wise and pound-foolish. We are testing and training around our business continuity plan, including the FFIEC updates. Be prepared and stay safe out there! For more information on contingency plans, please contact Jay Kenney. n Jay Kenney SVP, Regional Manager Phone: (213) 247-5096 jkenney@pcbb.com pcbb.com Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solu- tions includes cash management, international services, lending solutions and risk management advisory services. GLOBAL PANDEMIC