In-Depth: Top 10 Considerations For Pandemic Responsiveness
Supplement to Top 10 Considerations For Pandemic Responsiveness (Barack Ferrazzano Client Alert, March 2020)
- Business Impact Analysis. Have you conducted a formal pandemic-related business impact analysis? It should assess and prioritize your essential business functions, and identify the potential impact of a pandemic on those functions, as well as on your employees, customers, and critical service providers.
- Risk Assessment. Banks should develop an effective risk assessment that captures potential pandemic-related issues. For example, has your bank updated its succession plan and identified how employees are cross-trained to address significant employee absences? Have you identified potential weaknesses in service and supply chains, and developed potential alternatives?
- Pandemic Plan. Has your Board overseen the development of a pandemic component to your written business continuity plan that is tailored to your institution, sufficiently flexible to address possible scenarios, and appropriately updated and tested? Is the plan disseminated to your employees? Does it contain all the elements described in applicable regulatory guidance, such as redirecting customers to alternative delivery channels, establishing visitor procedures and restrictions, and conducting operations from alternative sites?
- Stay Informed. The rapid tempo of pandemic-related updates is changing by the day, and sometimes by the minute. Is someone at your bank responsible for monitoring evolving government mandates, regulatory guidance, and reputable health-related information sources, and disseminating that information throughout the bank?
- Reserves, Supplies, and Equipment. Banks recognize the need to maintain sufficient liquidity during times of uncertainty. You also should ensure that your bank is stocked with essential supplies, and that its equipment is properly maintained in the event of potential service disruptions.
- External Coordination. Are you effectively coordinating with your regulator(s), business and community working groups, service providers, the media, and public health and emergency management officials? Are you constantly assessing neighborhood infrastructure capacity for your locations?
- Customer Relations. In this era of “social distancing,” are you appropriately spacing out customers and staff, and ensuring that your locations are subject to enhanced hygiene efforts, such as more frequent cleaning procedures? Are you prepared to appropriately notify customers and your regulator(s) if you are forced to close one of your branches, or significantly limit its operations? Have you considered alternatives to closing branches, such as enhanced use of drive-up windows, online/telephone services, and ATMs? Be particularly sensitive (from a fair lending and CRA perspective) about how you address branches in majority-minority and low- and moderate-income areas, and remember that all of your customers will remember how you treat them during this vulnerable time.
- Third-Party Agreements. Have you inventoried your third-party agreements, including those with applicable force majeure clauses, to determine your bank’s rights and responsibilities as they relate to pandemic-related issues?
- Malicious and Fraudulent Transactions. Do you know that malign actors frequently take advantage of disasters to engage in nefarious activity? FinCEN recently reminded banks of this unfortunate fact, and encouraged them to be vigilant about trends such as impostor scams, investment scams, product scams, and insider trading, as well as benefits fraud, charities fraud, and cyber fraud.
- Employee Issues. The broad scope of pandemic-related human resource issues, including employee protection strategies and remote access issues, is beyond the scope of these considerations and the related Client Alert, and will be covered in a subsequent alert.
