July 9, 2020 | Posted by Michael Berman
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4 Minute Read

For many financial institutions, the past four months have been an unplanned test of the FI’s business continuity management (BCM) capabilities.

From keeping staff and customers safe and healthy to facilitating access to critical Paycheck Protection Program (PPP) funds and making accommodations, it’s been a radically busy few months.

As your FI continues to cope with the COVID-19 pandemic, it’s important to find time to regularly evaluate your operations and business continuity management to ensure plans are performing as expected and emerging risks are mitigated. In a quickly changing environment, it’s possible that a plan that covered all the bases last month needs to be altered to address new factors.

Is your BCP everything you need it to be? Make sure you assess these seven areas:

  1. Strong leadership. Someone at the FI should be managing the pandemic plan. This point person should regularly gather input, assess the situation, and suggest new courses of action. Risk management is essential. This leader should monitor the pressure on risks and controls and decide if any temporary policy adjustments are needed. Consider how well the pandemic manager is faring and whether more resources are needed for this draining task. If no one has been cross-trained as a back-up, now is the time to make sure there are others who can fill this essential role.

  2. Effective remote working. There is a difference between occasional working from home (WFH) versus the semi-permanent situation many now face. Make sure your FI has provisioned and tested its remote working infrastructure focusing on capacity and resilience. Ensure your staff has what they need to work from home, everything from screens, connectivity, phones, headsets, and voice/video conferencing and assess whether those needs have evolved. Make sure BCP training continues and everyone knows their role.

Work-From-Home Risk Assessment

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  1. Prevention and prompt response to illness. Have you experienced a suspected or confirmed case of COVID-19 at one of your locations yet? Were your social distancing, human resources, custodial, and internal and external communication plans effective? Did your employees and customers feel safe? If gossip or misinformation (or much worse, COVID-19) spread, your plan needs improvements.

  2. Vendor management. Have critical vendors continued to deliver on products and services? Has the landlord, if applicable, worked with you to ensure the safety and cleanliness of your offices? Have key suppliers, especially those who provide onsite services like cleaning and security followed best practices? Have vendors or suppliers had financial issues that have caused them to experience problems or change their billing cycle?
     
  3. Business operations. Environmental changes may mean rethinking plans, especially if there are national or local mandates related to COVID-19. If your FI has a major change or product launch on the horizon, it may be necessary to reconsider the timing and postponing it until you know you have the time, resources, and market demand to effectively support it.

  4. Customer support. Have you kept customers in the loop about any changes that impact them directly? Have you proactively tried to help them? Have your efforts been successful?

  5. Employee flexibility. Employees are struggling to cope with school closings, home care of sick relatives, and stress. Whether they are in the office or working from home, have you been able to accommodate employee needs as well as you’d like? When in doubt, over-communicate with staff. In times of stress, people want to hear from leadership frequently – even if there is no new information. Also, reexamine health care coverage for any possible issues.

The Bottom Line: The COVID-19 pandemic is likely to get worse before it gets better. Plan for an extended period of disruption, possibly in waves. Keep a constant eye on the situation, adjusting your approach as circumstances require.

How strong was your financial institution’s response to the COVID-19 pandemic? Find out with Post-Pandemic Incident Assessment.

Michael Berman

Michael Berman

Michael Berman is the founder and CEO of Ncontracts, a leading provider of risk management solutions. His extensive background in legal and regulatory matters has afforded him unique insights into solving operational risk management challenges and drives Ncontracts’ mission to efficiently and effectively manage operational risk.