Here comes Florence. Is your bank prepared?

Published September 11, 2018 10:00 AM

Updated June 1, 2021 1:38 PM

1 Min Read

A "Dry Gully" sign stands in floodwaters due to Hurricane Harvey in Spring, Texas, U.S., on Monday, Aug. 28, 2017. A deluge of rain and rising floodwaters left Houston immersed and helpless, crippling a global center of the oil industry and testing the economic resiliency of a state that's home to almost 1 in 12 U.S. workers. Photographer: Luke Sharrett/Bloomberg

Luke Sharrett/Bloomberg

Tape, batteries and attaboys: A natural-disaster checklist for banks

With Hurricane Florence on track to make landfall along the East Coast later this week, bankers in its path have to be prepared.

The storm, which the National Weather Service upgraded to Category 4 on Monday afternoon, could wreak havoc from South Carolina through the Mid-Atlantic. The National Weather Service warned that Florence “is expected to be an extremely dangerous major hurricane.”

Preparing for a storm can be challenging. For one, storms have varying characteristics. Last year hurricanes Irma and Maria delivered crippling winds that destroyed buildings and cut off communication, while Hurricane Harvey brought with it severe flooding that ravaged houses and knocked scores of branches out of commission.

Hurricane responses are also varied. The severity and longevity of a storm will determine how quickly branches reopen — if they ever reopen at all. Employee availability and customers’ needs will also differ based on the damage unleashed on a particular market.

Having an emergency preparedness plan is necessary for dealing with the aftermath of a storm. At the same time, bankers must also have a backup plan for their backup plan.

Bankers staring down Florence can learn from how others have responded to natural disasters. American Banker hosted a panel of bankers earlier this year — Bill Penney of Marine Bank & Trust, Beth Corum of Capital City Bank, Kyle Puchta of Regions Financial and Andy Lapierre of Frost Bank — who shared their lessons from last year’s hurricane season.

Six of those follow. Applying these lessons could put banks in better shape to respond to Florence and other types of disasters.

Distribute spare cellphone chargers

Many banks use texting services to stay in touch with employees during and after storms. But those services are useless if the power dies and cellphone batteries run out. Penney, Marine Bank’s CEO, gave his staff members battery packs, similar to the ones handed out at many industry conferences, to ensure they had enough juice until power was restored.

Take care of employees

A disaster provides a good opportunity to show employees how much they matter. As Harvey approached Texas, Frost Bank assured its workers that they would still get paid regardless of whether they were able to make it to work. The bank also started a collection effort to provide affected employees with items ranging from food and diapers to clothes and pet supplies.

Help clients make payroll

Marine Bank contacts its cash-intensive business customers before a storm to tell them when branches will close so they can come in and get funds to cover payrolls. After Irma passed, the bank made “open” signs with posterboard and tape, placing them in front of branches. “You can tape that sucker to a chair and suddenly everyone knows you’re open,” Penney said. Corum, Capital City's co-chief operating officer, agreed that it was important to reopen branches to assist with recovery efforts.

Educate customers in advance

Regions found out the hard way that customers aren’t always up to speed with mobile banking. Its call centers were inundated after Harvey with questions about issues including forgotten passwords. About two weeks later, before Irma, the company emailed customers to remind them about mobile banking and encouraged them to know their passwords before the storm hit. It worked, reducing traffic in the call center.

Improvise

Natural disasters can inflict all kinds of damages on branches, including knocking out alarm systems. Regions decided during last year’s storms to open the drive-thru of a branch that was otherwise closed; it was a service to customers that could be pulled off with limited staff and a security guard. The company also opened portable branches, powered by generators and wireless routers, in parking lots.

Regions’ first portable-branch customer — disappointed when his regular bank office remained closed — asked to open an account, something that caught employees off guard. Puchta, Regions’ vice president of incident response and workplace safety, said the company now has packets ready for future opportunities to bring on new customers.

Regulators are watching — use it or your advantage

Puchta and Lapierre, Frost's senior vice president of business continuity services, said regulators were monitoring their social media posts on opening and closings as Harvey battered their markets. Both banks received real-time guidance from regulators on how to improve communication. It proved to be one more thing for bankers to juggle while tracking down employees and helping clients, but a well-executed strategy could impress.