Rebuilding Lives & Livelihoods
For even the hardest-hit of credit unions, one location is high, dry and open for business after Hurricane Katrina-the online branch.
"Judging by the traffic, online banking is much needed and has helped us reach out to displaced members all over the country in the absence of branches that are underwater in New Orleans," said John Milazzo, CEO of $300-million Campus Federal CU of Baton Rouge, La., the week after the disaster.
A temporary "blog" branch set up by $10-million New Orleans Clerks and Checkers FCU at a web log site is helping members do business after the disaster, even though the Metairie, La.-based CU is currently operating out of a home exercise room in Oklahoma, according to Fidelity Integrated Financial Solutions.
Brick-and-mortar and local ATMs were leveled or flooded after the disaster, yet the online branch stood standing, the only visible, branded trace of many credit unions hit by Katrina and Pontchartrain.
The online branch alone did not save the day, said Steve Schexnayder, senior vice president of Information Systems at $260-million Neighbors FCU of Baton Rouge, La. Other remote services are also a beacon in the storm, he said. Three Neighbors FCU branches ran on generators for three days before power was restored and they reopened. Then, the credit union moved on to help out its harder-hit peers in New Orleans, Schexnayder said.
"Remote services are the priority because it is unclear when and if you can get back to your existing branches or where it would make sense to put a new or temporary branch," Schexnayder said.
"In this disaster, it did not seem as important to have branches up and running as it did to have shared service centers, homebanking, audio response, ATM and call centers online as quickly as possible so that credit unions could communicate with their members," he continued. "Many members who did not use homebanking were now staying with friends or family who were familiar with those services and could help them get online to check the website for information or could help them use ATM cards."
Keeping the online branch online during the disaster was not always smooth. Gulf Coast telecommunications failures shut down many remote services-at least temporarily.
For example, the New Orleans frame-relay circuit running Neighbors FCU homebanking service was flooded and shut down for three days.
Credit unions and their vendors responded quickly to downed circuits by relying on alternate connections.
Neighbors FCU used Virtual Private Network (VPN) equipment to reroute Internet banking traffic until communications were restored, as did Cavion Plus, providing Internet banking platforms to seven impacted CUs, and Digital Insight Corp., providing online banking for 11 impacted CUs.
One Digital Insight credit union was able to bring up online banking in just hours by redirecting connectivity to a disaster recovery location, whereas other less fortunate or less prepared CUs took up to a week to restore service, according to Woody Woodruff, DI's director of Network Operations.
"Communications failures were the greatest cause of technology difficulties for our clients," added Brennan Baas, vice president of Client Services at Cavion Plus. "None of these customers had Integrated Services Digital Networks (ISDN) backup circuits. ISDN backup can play a vital role in maintaining online services. We're definitely planning to encourage more credit unions to add ISDN backup as part of their business continuity plan."
Substitute VPN-based infrastructures may be around for awhile. Gulf Coast carriers and service providers aren't sure how long it will take to restore damaged circuits.
"Every disaster presents different challenges," added Schexnayder. "Because of the magnitude of Katrina we need to make sure our disaster plan addresses all of our delivery channels."
For info on this story:
* Campus FCU at www.campusfederal.org
* Neighbors FCU at www.neighborsfcu.org
* New Orleans Clerks and Checkers FCU at http://noccfcu.blogspot.com/
* Cavion Plus at www.cavionplus.com
* Digital Insight at www.digitalinsight.com