Keeping Your Financial Institution Resilient Amid the Coronavirus

Guidehouse has been in constant communication with financial services clients as we help them prepare for COVID-19. In conjunction with information from the Centers for Disease Control and Prevention (CDC), summarized below are additional observations and recommendations for how to mitigate the impacts of the Coronavirus on your organization. This is not a one-size-fits-all challenge and the situation is extremely fluid. Guidehouse can apply our expansive business continuity and disaster recovery experience to your unique situation to ensure optimal preparedness.

Financial Institutions Should Take the Following Short-Term Actions:

  • Limit or eliminate nonessential travel, as per your organization’s needs.
  • Travel recommendations are constantly being updated. Companies should be routinely monitoring the CDC website for changes and have a clear communication plan for employees who have just travelled, who are currently traveling, or who plan on traveling. The situation can change dramatically in the event of a domestic or local outbreak.
  • Allow all employees who can work remotely to do so.
  • Conduct stress tests of infrastructure and pandemic communications protocols before an outbreak. Shore up any weaknesses by forcing employees to work remotely. This will also bring to the surface additional challenges if no employees are physically present in the office.
  • Eliminate or limit as much as possible: Conferences, meetings, training sessions, social gatherings, or any places where large numbers of people might be in close contact with each other.
  • Examine the company’s business continuity plan for a pandemic situation. Understanding what functions are critical, as well as understanding key employee dependencies, are necessary. The most critical processes with the fewest employees having those capabilities must be immediately addressed. Cross-training or looking to outside vendors to fix any deficiencies is essential. Companies are actively looking for additional staffing options or to run certain operation functions from outside vendors. Evaluate partners to support key functions or non key functions so other staff can focus on supporting critical business.  

Financial Institutions Should Consider Taking the Following Actions as the Situation Unfolds:

  • Split Up Your Teams: Only allow cross-function teams to sit together; You would not want the only five people in your company who can perform a critical function to sit near each other. This increases the chance you lose everyone with that capability. Most offices are set up so the teams sit together for collaborative purposes, but this is risky during a pandemic. Example: If a company has all its actuaries sitting on the same floor in the same building, they should be divided and moved to different areas so they will not encounter each other. This suggestion should be implemented down to the smallest sub-teams and processes. Begin cross-training employees on critical processes few in your company can now perform. This is especially true with the more modern “open floor” setups. 
  • Avoid Community Spread in a Modern Office Setup: Like the point above, “open floor” setups and offices that “hotel” cubes are particularly vulnerable to spreading illness. Switching employees from cube to cube via a hoteling model can promote one sick person contaminating multiple areas. Because all offices are set up slightly different, mitigating this risk needs to happen at the local level, based on the individual setup. This applies not just building by building but also floor by floor. A customized solution to mitigate the risk of community spread must be arrived at as soon as possible.
  • Minimize People Working Together: Companies in Japan and China have been doing more shift work so that employees come into less contact with each other. This can be easy to do for less complex processes, but more difficult the more complex the process.
  • Adopt Sick-Time Policies that prevent sick employees from entering the office: Ensuring paid leave for sick employees and suspending sick-day limits will encourage sick people to stay away from the office. There was an active flu season and employees may be low on allowable sick time and feel obligated to come to work or can’t afford to miss work if leave is unpaid.
  • Get Ahead of Your Backlog: Many companies have work that is completed in a cycle. For example, the claim payment, mortgage review, or test cycle may require 30 or 60 days from start to finish. Get ahead of that cycle by having employees work overtime now to clear their queues and allow a cushion in the event of a workforce reduction. This is less effective for quick-turnaround processes.
  • Have a Well-Tested Communications Plan: Many companies use vendors for this. Automatic calls or texts can provide employees with updated information. This is most commonly used now for inclement weather updates. Companies should send Coronavirus updates to employees now to get them used to the process. This will also identify which employees are not be getting the messages. An easy first message is to direct everyone to each firm’s emergency management and crisis management plans. It is critical that people are accustomed to using to the messaging technology.
  • Ensure Proper Training: Begin now to get your staff up to speed on what to do in the event of a pandemic.
  • Educate Staff on Model Interaction with Other Employees: We are already seeing unclear and inconsistent communications and instructions with individuals who have traveled to highly impacted areas. There should be very clear policies on international travel, with specifics geared to each foreign country involved. Determine how long someone should stay out of the office after foreign travel and educate non-traveling employees that the company is taking steps to safeguard them as well. The definition of “travel” itself should be examined. Is travel by car the same as travel via a plane/train in terms of disease risk? What about daily commuting? Most important, these traveling employees should not be treated any differently.
  • Emergency Response Execution: Despite the very best planning, a pandemic will expose weaknesses in your response.   Be ready for it. An executive- or senior-level “SWAT” team should be empowered to handle problems when they arise. Of course, simulations and testing now can minimize this as much as possible. The team should have the authority to enact plans, including travel restrictions, closing offices, sending communications, etc. 
  • Manage Controls and Separation of Duties: In a reduced workforce, there can be a desire to suspend certain separation of duties or allow access to procedures previously denied. An outside advisor to provide independent oversight will give additional breathing room during the crisis and will shorten the time needed to return to business as usual. Post-mortem reviews should also ensure that changed roles and responsibilities were not exploited or allowed undesired activity.

Guidehouse understands that potential pandemics and volatility can challenge an organization’s resiliency. We are committed to exploring options that will not only help organizations prepare for these issues but improve resiliency in responding to them. Stay tuned for more communications regarding business resiliency soon.

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