Closing in on 2000: First of a Series
Willie C. Kennedy, KeyCorp's year-2000 project manager, was catching up on his housework last week. Expecting several visitors to his home over the holidays, he was vacuuming the place to get it ready. His mind was far away from the office, where this week he will be making final preparations for the turn of the year Friday night."We have been preparing for this for five years," Mr. Kennedy said. "We are as ready as we can be."
Martin Lippert, chief information officer at Royal Bank of Canada, which also has been addressing the Y2K problem for five years, said, "We think it's a nonevent."
Still, KeyCorp, Royal Bank, and the rest of the industry will have battalions of employees working this week and weekend to guard against trouble from the so-called millennium bug.
Many banks are opening Y2K command centers this week. First Union Corp. opened one Monday in Charlotte, N.C., that is linked to other First Union centers around the world. Several senior executives are working there in shifts, and thousands of employees are on call.
KeyCorp will have 3,100 of its staff on the job starting Thursday at its primary command center, 18 "event centers," and various subcommand locations. Early Saturday in Australia a friendly provider of financial services will contact KeyCorp's Cleveland headquarters to give some indication of what to expect when the clock strikes midnight later in the United States. Systems verification will end at KeyCorp on the morning of Jan. 4.
Bank of Hawaii operates in one of the first places the New Year will arrive, Fiji, and one of the last, American Samoa. "We'll start earlier than most banks," said Mary Carryer, vice chairman of $15 billion-asset Bank of Hawaii. "And we'll have a 24-hour rolling time line to get each of our banks through midnight. We're probably unique in that regard."
Because of its unusual geographic spread, Bank of Hawaii will be hosting regulators from the Federal Reserve and Federal Deposit Insurance Corp. in addition to some members of the bank's executive management at its command headquarters in Honolulu.
Executives at Chase Manhattan Corp., the third-largest U.S. banking company, are caught up in last-minute meetings to prepare for the countdown. At 6 a.m. on Friday, Chase will open 27 command centers and 52 satellite centers around the globe; they will remain in operation until Jan. 11.
About 3,000 people will work in the command centers, and more than 14,000 will come to work over the New Year's weekend to check computer systems. The bank has booked 850 hotel rooms in New York City alone to accommodate them.
Amsouth Bank in Birmingham, Ala., is requiring all of its 14,000 employees to work during the two-week holiday period. Its command centers in Birmingham and Nashville will open at noon on Thursday and continue until Jan. 5. "We fully expect activity not to be significant after the date change," said Greg Miles, senior vice president and manager of electronic banking.
Mellon Financial Corp. will have 5,600 people, including its most senior executives, putting in shifts over the holiday weekend. Allan Woods, chief information officer, will work from 4 p.m. on New Year's Eve to 8 a.m. New Year's Day at the central command post in Pittsburgh. Accompanying him will be the chairman, Martin McGuinn, and senior vice chairman, Steven Elliott, of the banking company. Mellon's president, Christopher Condron, will be at a center in New York.
"At 1 a.m. eastern time our 24 command centers will hold a conference call that will include all our senior people," Mr. Woods said. "It's a leadership issue. We want to make sure people know the leadership team is with them."
Mellon was one of the first banking companies to say it would be open for business on New Year's Day. About 70% of its 375 offices, including 100 branches in supermarket locations, will be open Saturday "to reassure our customers that their accounts are still there," Mr. Woods said.
Some employees at Amsouth's command centers will be monitoring world events on the Internet and on television. Others will participate in a "fairly detailed calling procedure," Mr. Miles said. "We expect people in our 700 branches to report in at certain times. If we haven't heard from them, we'll call them to go through our checklist."
Royal Bank of Canada will have some of the 240 systems people in each of its three centers operating "fairly elaborate call trees," said Mr. Lippert. The bank has scheduled telephone calls with several partner firms around the world at 9 a.m. and 9 p.m. on Friday, to check conditions there.
"If early on Dec. 31 we start to see problems surfacing in New Zealand that could circulate around the globe, then these may or may not become real concerns," Mr. Lippert said.
John Cleghorn, Royal Bank's chairman and chief executive officer, will be carrying a satellite phone in case conventional phone lines go down.
KeyCorp will host a secure site that will operate "like a chat room," Mr. Kennedy said. It will connect to the Bank Administration Institute and Federal Reserve command centers. There also will be an "event wire," he said, where the top 50 financial institutions in the United States can communicate and determine each other's status.
Catherine Allen, chief executive officer of the Financial Services Roundtable's Banking Industry Technology Secretariat, said BITS has set up a communication system for the top 30 banks' CEOs. They have agreed to keep telephone lines open wherever they go this weekend, and to use satellite phones in case of telephone failures.
"We've got more devices than you could think of," said Mr. Woods of Mellon. "We're wired from head to toe."
The Society for Worldwide Interbank Financial Telecommunication, which operates its messaging network in 170 countries, will have a command center at its headquarters in Brussels and regional centers for Asia-Pacific, Europe, and the Americas - the latter in Virginia.
The 700 people working at the centers - about half of Swift's employees - will "monitor our own activity and ensure availability to our network," said Paul Janssens, manager of the command center.
The association will participate in daily, industrywide international calls. It also has set up a toll-free phone number and will broadcast status information across its network. "We will never report on an individual institution. We will report on our own infrastructure," Mr. Janssens said.
He added that Swift has "planned everything you could think of in terms of logistics. We've organized catering and sleeping arrangements with beds at the office and bedrooms at hotels. We've reserved sports utility vehicles to get people to work if it snows."
The precautions are worthwhile, he said. "Y2K is too important, given its visibility. We cannot afford to have a problem. I'm quite confident it will be a success."
Banks plan to be vigilant of demands on their ATMs and call centers.
Amsouth is monitoring its ATM cash levels on a real-time basis. "We've arranged for 24-hour on-call service with our cash replenishment vendor and 24-hour maintenance coverage," Mr. Miles said.
And Amsouth's 24-hour customer service centers in Alabama, Florida, and Tennessee will be staffed with an additional 125 employees. "We're taking reasonable to excessive precautions," said Mr. Miles. "People expect to get someone if they call."
Hibernia National Bank of New Orleans plans to send people out at midnight Friday to check that ATMs are functioning properly, said Ben Gautreaux, senior vice president and Y2K project manager. All branches will have employees coming in to verify the status of supplies.
Complicating matters for this $15-billion institution is that the national championship of college football will take place Jan. 4 in the Sugar Bowl in New Orleans. "We anticipate a greater volume of cash needs because of tourism, not because of Y2K," Mr. Gautreaux said.
In general, celebratory parties will be kept to a minimum and occur before 11 on New Year's Eve. Most banks will give food and drink to those who are working. All of Chase's cafeterias will be open, and food will be free. Where there is no cafeteria, catered food will be brought in.
Hibernia employees, "given that we're in Louisiana," will eat well, Mr. Gautreaux said. Hibernia has arranged to cater "a good seafood menu" on Friday and Saturday nights to the 300 people who will be working.
After much discussion, management at Royal Bank of Canada decided not to host a general staff party during the weekend. "At the end of January or early February we'll have a recognition event for all those involved," Mr. Lippert said.
At Intuit Inc., employees already have already brought in sleeping bags, said Mark Goines, senior vice president of the software maker. "I imagine a party will take care of itself," he said.
Intuit is not offering pay or bonus incentives to people working on the weekend. Royal Bank of Canada is offering its normal time and a half for the weekend and double pay for the holiday. Managers, however, will not receive anything above their regular salaries.
Many banks have not had to provide incentives to their workers to come in over the weekend. "Our employees really care about this," Mr. Goines said.
At Bank of Hawaii "there will be a lot of people working," said Ms. Carryer. "They want to be there to see that it works."
KeyCorp's Mr. Kennedy agreed. "It was not that difficult to get volunteers. So many of them have been working on this project for so long, they wanted to see it through."
Next: Cash flows and re-flows.