Pub. 10 2020 Issue 2

7 PUB. 10 2020 ISSUE 2 financial sector was in really good shape heading into this pandem- ic,” says Accenture's Val Abend, a former Treasury official who oversaw a 2007 pandemic planning exercise. “ We have a lot that we can stand on ... to survive this as a sector.” As banks work to meet these challenges, Abend offers several sug- gestions for financial institutions facing a pandemic situation. 1. Review the guidance Like banks, the regulatory agencies have been singularly focused on the coronavirus in recent days. The Federal Financial Institutions Ex- amination Council recently updated its guidance for banks on business continuity planning in the face of a pandemic, and the agencies have subsequently issued additional guidance on serving customers and ensuring daily operations during this time. (Bankers can find this guid- ance and other important coronavirus updates at aba.com/coronavirus. ) If banks have questions or need to adjust operations to respond to the coronavirus, Abend recommends that they keep examiners in - formed. As for how best to communicate? “ I think 'early and often ’ is very good advice.” 2. Communicate “ Communication is obviously an incredibly important part of all this,” Abend adds. Fortunately, there are many different options available for banks to communicate with customers: from physical signage outside the branch, to text messages, to Facebook, Twitter or Instagram, banks have a range of options for disseminating im- portant information. The timing of these communications is crucial. “ Today, there are a lot higher expectations from your stakeholders — from your customers and your employees — around communica- tion and transparency in a moment-by-moment basis,” Abend says. For banks, it ’ s all about “ establish[ing] that higher level of transpar- ency to meet those expectations.” Banks should also communicate amongst themselves about the steps they're taking to address the pandemic at their institutions. Abend encourages banks to share their pandemic response plans with neighboring institutions. Finally, banks should keep their third-party providers apprised of any changes to their operating status. “ Third parties are not just vendors, but really important components [of] your supply chain,” she says. “ If you have a situation where you're going to back up sites, or you're going to relocate different branches ... you must have strong communications.” 3. Reach out to important local stakeholders Other important contacts to make include local stakeholders like government and health officials, emergency management services and utilities providers. “ Have conversations in your local markets to make sure that they understand how important it is that you keep the lights on for your institutions,” Abend says. Banks should also communicate amongst themselves about the steps they’re taking to address the pandemic at their institutions. In pandemic situations, local and state governments have the au- thority to make decisions about closing buildings, events and even roads, she adds. That's why it's critical to maintain what the FFIEC guidance refers to as “ triggering events” that would require bank management to implement its response plans based on the alert sta - tus. ABA SVP Paul Benda recommends having a clear, defendable process in place outlining the circumstances that could necessitate a branch closure. “ Having something you can tie back to government action is always helpful,” he says. 4. Review your succession plan In a pandemic situation, banks may also see absenteeism rates rise and must ensure that critical functions can be transferred to the appropriate person. “ You should plan for about [a] 40% absenteeism rate,” Abend advises. Attention should be placed on cross-training appropriate employees and communicating clearly if roles need to shift. “ It ’ s important that you not only say what the succession plan is, but that the people in the secondary and tertiary roles know what their jobs are for those critical functions.” 5. Be aware of cyber threats Unfortunately, in this climate of fear and uncertainty, criminals are taking full advantage of the opportunity to perpetrate fraud scams. Already, the banking agencies have been alerted to several fraud scams related to the coronavirus situation — one scam even prompted the FDIC to respond with a statement assuring consum- ers that insured depository institutions remain the safest place for consumers to hold their funds. Abend notes that criminals are starting to put up webpages with interactive COVID-19 maps as “ watering holes” that can be used to lure unsuspecting individuals browsing on the internet and then dis - tribute credential-stealing malware. Along with that, spear-phishing attacks continue to prey on fears about the virus, while business email compromise scams are ramping up as most employees are now working from home. “ Stay vigilant,” Abend advises banks. “ Do not relieve your VPN. Do not relieve your endpoint protection. That is exactly what the bad guys are looking for.” w Monica Meinert is a Senior Editor at the ABA Banking Journal. This article originally appeared in the ABA Banking Journal and is republished here with permission.