At Jack Henry™, we know that many communities ‒ especially in western North Carolina, eastern Tennessee, northwest Georgia, and the west coast of Florida ‒ are still in recovery mode from the 2024 hurricane season, and that there is still a lot of hard work ahead. Our thoughts and well wishes remain with everyone impacted during this very difficult time.
As I looked back over past articles I’ve written on the Atlantic hurricane season, I’ve used words like “observations” and “lessons learned.” After all, I observe behavior in the financial services sector, and when some of those observations are of repeated challenges, year after year, I often wonder if anyone has really learned anything from what has happened before.
As a result of the pandemic, many of us either acquired capabilities to do our jobs from almost anywhere, or the platforms and tools that were already in place got exponentially better over the past four years. So, whether we’ve learned anything from past hurricane seasons or not, there are some key takeaways in the areas of people, connectivity, and data that any financial institution, regardless of geographic location, can benefit from.
People Are the Heart of Your Organization
If you were to ask your employees during non-disaster times if they could be counted on during a disaster to do whatever is necessary to help restore the business, most likely, a high percentage would say yes. It’s also likely that for many of them, that would be a “qualified yes,” because they may have some contingencies hanging on that response.
Your employees might have questions like, “What about my family and/or pets? Where will I stay? Are there adequate provisions like water, food, and medical supplies?” As a hurricane or natural disaster approaches, what is reasonable to expect from your employees?
Employers who expect their employees to take care of the business have a responsibility to make sure all personal safety and family concerns are properly addressed in advance. Your employees want to do everything they can to help the community and your accountholders, but they can’t be expected to do that without knowing their families’ needs will be met and that they will have what they need during a potentially lengthy event.
Financial institutions must also consider their accountholders. Your customers and members expect information about their finances and access to their money, 24/7/365. One of the most helpful things you can do for your accountholders during a disaster is implement measures to reduce stress. When you’re in the middle of a disaster, it’s not the time to work through these considerations. Instead, ask these questions in advance, and know what your position will be:
- Should accountholders be allowed to skip loan payments?
- Should accountholders be offered low-interest, small-dollar loans? If so, what are the rates and amounts to be made available, and what will the repayment terms look like?
- Should accountholders be able to defer mortgage payments up to a specified number of months?
- Should your call center initiate calls to assist with fundraising for established local entities and charities?
Since a number of these solutions involve updates to software settings that are rarely touched following implementation, some advance research on how and what to change can save a lot of time and headache during an already stressful situation.
Operational resilience planning is a necessary and critical component for your ongoing success. Your accountholders and employees aren’t just there with your financial institution because they don’t have a choice. They are there because they choose to be. That means there’s something about your financial institution that attracts and retains accountholders and employees – so recognize that and act accordingly.
Connectivity Keeps Things Moving Forward
Almost everything in today’s world relies on access to information ‒ and sometimes to people with access to information ‒ and all of that requires high-speed connectivity. Smartphones and cellular-enabled tablets are everywhere … and many people have more than one!
In areas that were significantly impacted by hurricanes this year, it seems that as long as people had their devices charged, they were trying to use them. ISPs were wiped out, and while access to 5G, LTE, and even 3G (yes, that’s still out there) was interrupted, providers were restoring services as quickly as possible. There was also a notable presence of “pop-up” Wi-Fi and the availability and rapid deployment of Starlink. But it’ll still take weeks to return any stable fiber-based or cable connectivity to large areas.
Another consideration is satellite phones and data access. While this technology is more prevalent and costs less than it did five years ago, it’s still considered expensive by today’s standards. But it works well, and if connectivity is required in the first 12 to 18 hours of a passing event, it may be the only option available.
While we’re on connectivity, let’s discuss outsourcing. This is a great strategy for getting mission-critical systems and applications out of your building and under the roof of a service provider, but you have to make sure that your recovery strategy addresses how your employees will access these systems during a disaster. After all, do you want your accountholders to have more access to information and data than your employees do? How are your employees going to service your customers if those employees have no connectivity to your outsourced solutions?
One last thought here on connectivity: if having the availability of bandwidth is king, then having a properly configured device to use the bandwidth is queen. We’ve seen situations where financial institutions took a catastrophic loss, and their remediation plan was to go to Best Buy or a similar vendor and buy 10 to 15 new laptops.
While that’s a great first step, most environments that those new laptops need to connect to require a VPN and some type of authentication beyond just a username and password. There may also need to be a desktop application, browser plug-in, cookies, etc., that are also required for the new laptops to securely access your data-rich environments that you’re now desperate to get to. Is there a written process for that? Who has access to it? Are those people (or is that person) available in the midst of your disaster?
Data Is Your Most Valuable Asset
While people need connectivity from a properly configured device, systems need current data to remain relevant and available following an event. For those systems that aren’t outsourced, you need a solution in place that replicates your data out of the area multiple times each day. This should be standard operating procedure 365 days a year and not something “special” you do because a hurricane is coming.
Your data is more valuable than the cash you keep in your vaults. Not only are your accountholders entrusting that their data will be safeguarded from cyber events or data loss, but they also expect you to ensure the readiness of that data following an event. While accountholders in an immediate impact zone may appreciate the challenges more, a majority of financial institutions will have accountholders outside the impact zone who will have an expectation of no interruption to their data or the level of service they’re accustomed to.
Operational Resilience Planning: Learn from the Past to Prepare for the Future
The 2024 Atlantic hurricane season serves as a reminder that we shouldn’t underestimate what can happen. Some of the worst impacts were hundreds of miles inland. Remember, it’s never happened “here” until it does, and once it does there’s no guarantee that it won’t happen again ‒ perhaps even as soon as the next season.
Whether you were impacted directly or not by a named storm in 2024, keep in mind that bad things often happen on a big scale. The 2020 pandemic, political and economic turmoil, data breaches, and ransomware attacks aren’t going anywhere just because 2024 is almost behind us. The interdependencies between people, connectivity, and data have never been greater than they are today. Consumers’ expectations of their financial institutions to deliver the services they have come to rely on day in and day out have also never been higher than they are today.
Will the 2025 Atlantic hurricane season ‒ or some other big, bad thing – impact you, your financial institution, and your accountholders? Regardless of where you are, now is the time to identify and properly address your risks and mitigate any gaps.
Learn more about operational resilience planning and disaster preparedness solutions from Jack Henry™.
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