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Observations from the 2017 Atlantic Hurricane Season

Posted by Eric Flick

Dec 6, 2017 11:00:00 AM

Hurricane season brings special considerations for financial institutions

First and foremost, we at JHA know that many communities are still in recovery mode from the 2017 hurricane season, and that there is still a lot of hard work ahead. Our thoughts and well wishes remain with all of those impacted.

During hurricanes Harvey, Irma, and Maria, three key areas surfaced as points-of-interest: people, connectivity, and data.

People – If you were to ask your employees during non-disaster times if they can be counted on during a disaster – to do whatever necessary to help restore the business – most likely, a high percentage would say yes. It’s also likely that for many of them, that would be a “qualified yes,” because they have some contingencies hanging on that response. Your employees have questions like, “What about my family and or pets? Where will I stay? Are there adequate provisions like water, food, and medical supplies?”

Employers who expect their employees to take care of the business have a responsibility to make sure all life, safety, and family concerns are properly addressed in advance. Your employees want to do everything they can to help the community and the customers, but they can’t be expected to do so without knowing their family’s needs have been met, and that they themselves will have what they need during a potentially lengthy event.

Financial institutions (FIs) must also consider their customers. One of the most helpful things an FI can do for its customers in times such as these is to implement a number of measures to reduce stress. In the midst of a disaster is not the time for an FI to be working through these considerations. Ask these questions in advance, and know what your position is going to be:

  • Should customers be allowed to skip loan payments?
  • Should customers be offered low interest small dollar loans? If so, what are the rates and amounts to be made available?
  • Should customers be able to defer mortgage payments up to a specified number of months?
  • Should our call center initiate calls to assist with fundraising for established local entities and charities?

Since a number of these solutions involve updates to software settings that are rarely touched following implementation, some advance research of how and what to change can save a lot of time and headache during an already stressful situation.

Connectivity – Almost everything in today’s world relies on access to people and information, and all of that requires connectivity. Smartphones are everywhere! And we noticed that as long as customers had them charged, they were trying to use them. While access to LTE and even 3G were interrupted, we saw providers restoring services (although intermittent at times) much faster than during previous big storms. There was also a notable presence of “pop-up” Wi-Fi. While one must always use caution when connecting to a potentially unknown provider, major well-known providers deployed this technology by the dozens of access points in the hardest hit areas as soon as they could.

Another consideration here is satellite phones and data access. While this technology is more prevalent and at a lower cost than five years ago, it is still considered expensive by today’s standards. That said, it works well, and if connectivity is required within 24 hours of the passing event, it may be the only option available for a day or two.

Data – While people need connectivity, most of that connectivity is leading to systems that need current data in order to remain relevant and available following the event. FIs need to have a solution in place that replicates their data out of the area multiple times each day. This should be standard operating procedure 365 days a year and not something “special” the FI does because a hurricane is coming. (Check out our previous Strategically Speaking post, “You Failed Your Disaster Recovery Test – Now What?”)

FIs must realize that in today’s world, their data is more valuable than the cash they keep in their vaults. Not only are the FIs’ customers entrusting that their data will be safeguarded from cyber events or data loss – but they also expect FIs to ensure the readiness of that data following an event. While the FIs’ customers in the immediate impact zone may have more of an appreciation of the challenges, a majority of FIs will have customers outside of the impact zone, who will have an expectation of no interruption to their data, as well the level of service they’re used to.

The Atlantic hurricane season of 2017 should serve as a reminder to all, whether they were impacted directly or not, that bad things happen on a big scale. The interdependencies between people, connectivity, and data have never been greater than they are today. Customers’ expectations of their FI to deliver the services they have come to rely on day in and day out have also never been higher than they are today. The 2017 season begs the question: will it be another 10+ years before we see these types of impacts again, or do FIs have less than a year to be better prepared than they are today?

Topics: Processes & Procedures

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