Flash flooding in Maryland. Wildfires sweeping through California. Hurricanes ravaging Florida, Texas and the Carolinas. Tornados in Oklahoma. The disasters are different in type but the fundamental needs remain the same: food, shelter and of course money.
The availability of money, so often taken for granted, becomes especially urgent when people suddenly have to deal with a tree crushing their house or floodwaters submerging their kitchen. They need cash to gas up their cars, stock up on provisions and pay the contractor who rebuilds their home and businesses.
In fact, people will need their bank more than at any other time. Because when a storm or emergency situation hits—and customers’ lives get turned upside down—cash remains a grounded certainty in a sea of unknowns. Though we take credit, debit and digital payment technologies for granted, they don’t work when stores are damaged and systems down. That’s why most consumers will run to their nearest bank to get cash in worst case scenarios.
“Financial institutions, including banks, need to be responsive to their customers’ significant and urgent needs in the face of natural disasters and other dramatic, unexpected events,” says Mark Hamrick, Washington bureau chief and senior economic analysts for Bankrate.com. “Among the most important things they can do is to be available and flexible with their customers.”
Often, this is where making cash available comes into play. For instance, banks brought in mobile ATMs so customers after Hurricane Katrina and Superstorm Sandy could get much-needed cash. One photo on FEMA’s website shows a red Bank of America truck, looking for all the world like an emergency rescue vehicle, equipped with two ATM terminals.
And when you think about it, “rescue” is just the right word. For in disasters, banks need to make sure cash is available and easy to access. It’s critically important to customers who depend on them to make it through the storm.
Banks can also show empathy when it’s needed most by giving customers a much-needed break on fees. Banks can waive fees for such things as using out-of-network ATMs, non-sufficient funds, and late loan payments for customers affected by the disaster. This goes a long way towards giving customers a break when it will the greatest impact.
A banking stress test of another kind
While banks themselves may need to scramble as much as anyone else in a disaster—think of the branch that suffers blown-out windows, for example—they must somehow work overtime to assist customers through tremendous adversity. How banks respond may represent the greatest “stress test” of all.
Customer service is paramount when it comes to helping victims of a natural disaster, adds Beji Varghese, managing director at management consulting firm Guidehouse.
“All banks have to be sensitive to building a long-term relationship with the borrower,” Varghese says. “Because essentially everybody has loans, everybody gets new mortgages and you want them to stay with you. If you treat your customers poorly when they have difficulty, they’re never going to forget that. So from a retention perspective, treating borrowers as part of your community and helping them goes a long way in building relationships—not just with that person, but with the entire community as well.”
And in an age of ever-more-sophisticated weather modeling, banks can proactively plan for disasters using predictive forecasting technology and tools to create “what-if” scenarios and ramp up cash supply to branches and ATMs in affected areas leading up the event.
All told, a swift disaster response can elevate the bank from its everyday role. When all’s well, customers who depend on banks daily often take them for granted. But by getting on the front lines of a disaster—much as police, fire and emergency services do—banks can rise to a higher level. Think of it this way: When a house floods, there’s hardly a homeowner alive who wouldn’t welcome cash to help bail them out.