If Hurricane Katrina taught those in financial services anything, it was that no level of disaster preparedness is too great.
From losing one branch in a flood to the deaths of senior management, top executives at community banks across the area play out scenarios to ensure business will resume as quickly as possible for customers.
Lisa Dandeneau, chief operating officer at Credit Union Central Falls, said her institution’s plans divide the staff into teams, each with specific responsibilities. “We have a very comprehensive plan with a third-party consultant,” Dandeneau said. “Disaster recovery is part of the job description of many employees, and you couldn’t say that five years ago.”
The 90-year-old institution’s disaster plan covers alternative Internet service providers in the event of disabled telecommunication networks. The Central Falls branch is also set up as an emergency backup for the headquarters in Smithfield.
“If the entire state were devastated in some type of disaster, we have plans in place to set up mobile branches, anywhere,” she said.
Disaster plans cover weather-related incidents, which is the first type of catastrophe that comes to mind. But Gary Vierra, senior vice president of operations and systems for Slade’s Ferry Bank, said other threats also must be considered.
“We say, what if [our main office] blows up, or we lose members of our senior management staff? Security is the utmost part of doing business, especially with technology changing. You have to think there are always those who are trying to undo the system,” Vierra said.
Federal regulations require all financial institutions to have disaster recovery systems, and banks and credit unions must demonstrate preparedness in their yearly audits.
Vierra said Slade’s Ferry’s plan includes a third-party processing system in North Carolina – with a secondary site in the Midwest – to ensure that in a disaster, customers can still access funds. It also covers the safety of employees and the security of the bank’s facilities.
“If we have a hurricane, we assume we would lose electricity for a number of days, and we can prepare for that. We would go back to basics, paper reports, stamped receipts,” Vierra said.
Next month, he said, the bank is testing parts of its emergency plan. Technology has made financial backup systems easier, but drills give the institution a better understanding of how to best serve its customers.
“The best-laid plans on paper are great, but when they are tried is when you know what works and what doesn’t,” he said.
Colleen Medeiros, vice president and chief information officer of BankNewport, said she is confident that with the bank’s multiple layers of recovery systems in place, any disaster can be survived.
“Internally we have a disaster recovery plan to address buildings and what we do in the event of a disaster. But also if globally something happens, we have those systems in place,” Medeiros said. “We have redundancy to protect data, applications, circulation. If one goes down, we have one to pick up the service.”
Medeiros is a member of the nonprofit New England Disaster Recovery Information Exchange, or NEDRIX, a 1,700-member group founded in 1991 that allows businesses to share information about possible threats, disaster recovery and business resumption.
“The group is business leaders who come together to share strategies,” she said, “how they are dealing with potential risk and conduct disaster simulation. We know how we have to react. We know what everyone is doing and what we can learn from each other.”
Sharing information also helps financial institutions evaluate disaster plans by looking at other disasters. Soon after Hurricane Katrina demolished New Orleans and the Mississippi Gulf Coast in 2005, Elizabeth B. Eckel, senior vice president of marketing at The Washington Trust Co., participated in a conference call with other bank executives and senior staff at MidSouth Bank in Lafayette, La.
“One of the things they mentioned was how they partnered with other banks that had generators, and that gets into helping people who aren’t necessarily your customers,” Eckel said.
Washington Trust also has planned for a large-scale disaster that prevents employees from reaching their offices, for example, if interstate highways were closed.
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