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PCBB Banc Investment Daily August 13, 2014
Banc Investment Daily
August 13, 2014

Preparing For The Unexpected

Extra - extra read all about it! Ordinary bankers transformed as if by magic into an action superheroes! Really, it recently happened at one of our customer banks in Central Washington. The story of what this bank went through to take care of their customers in truly adverse conditions merits an article and some ideas for every bank's disaster preparedness and business continuity plan.
This small town bank was in the path of a very large forest fire and as the fire came close, keeping the bank functioning grew into an epic adventure of improvisation. The bank already had some things in place that helped them. For instance, they had a branch automation system that used scanned images for deposits and checks and those images went to the data processor for credit and were then available for customer use. The problem was that this was an epic fire, so outside the box thinking was also critical.
Electricity in the bank was the first thing to go, but the bank had a dedicated T1 line for internet plus two backup internet systems and an AT&T hotspot, so they were not too worried. Unfortunately, all 3 internet systems failed as 20 miles of fiber optic cable that served the town were burned. The hot spot soon followed as the cell towers failed one after another as generators ran out of fuel and couldn't be reached to be refueled. The good news is that the bank's land telephone line was functioning (albeit barely) for local phone calls. As is frequently the case in rural areas, everyone in the bank had the same mobile carrier, AT&T, with the exception of one person. That Verizon phone became the lifeline of the bank.
The bank's dedicated super-hero, the CFO, finally got around all the closed roads to get a Verizon hotspot in a neighboring town. The bank was run for 8 days on that one cell phone. The bank managed back office wire transfers and settlement through PCBB by photographing wire forms and instructions on the phone and emailing photos. Go try that with a big bank correspondent!
For the bank though, this adventure was far from finished. As is often the case with a weather disturbance created by a large forest fire, a huge thunderstorm broke loose. The resulting flash flood poured into the basement of the bank, where the electric generator was cranking away. Quick thinking and fast action by staffers got everything moved out of harm's way so business could continue as "normal", or at least as normal can be, running a bank on one cell phone and an electric generator.
Banks take their disaster preparedness and recovery planning seriously, but this tale really brings the concept of what can happen to another level. Many bank plans consider an outside catastrophe but focus on incidents that could happen within the bank rather than a complete breakdown of all surrounding infrastructure due to a natural disaster. It's not a time when your customers can lose access to their money either. Numerous bank customers in this situation were evacuated and some lost their homes in the fire.
We told a story last winter of iced roads preventing one bank's employees from getting to work for days. That bank had one remote laptop, but needed two for the required dual control to carry out cash transactions. We urge bankers to take these tales and study their own disaster and business continuity plan. Some rather simple ideas like not having everyone on the same cell phone carrier can be really important. Now that everyone is so dependent on internet, a backup satellite internet service especially in more remote areas could make a major difference. We always hope that no one will ever have to fully implement their disaster plan, but for the time it becomes necessary, test, test, and retest to be sure all the elements of possibility are considered.