After recent natural disasters, you may be wondering: How would I keep my business open if the unexpected were to happen? Doug Robertson, the Senior Vice President and Deposit and Treasury Management Director, has experienced this firsthand: he helped Fifth Third Bank clients affected by Hurricane Harvey navigate the issues caused by the storm. Robertson specializes in liquidity management and offers these strategies to help your business prepare.
As wildfires and hurricanes taught many business owners across Texas, Florida, and California in 2017, a natural disaster can wreak havoc on not only lives and homes, but commerce as well.
Even those spared direct water or fire damage endured several days without electricity or Internet, placing significant strain on day-to-day business operations and liquidity management. Imagine running payroll, accepting deposits or paying vendors without online access to your bank.
“This is the perfect opportunity to dust off your business continuity plan,” says Doug Robertson, Senior Vice President and Deposit and Treasury Management Director. “Take a look at the manual processes you may need to employ in the event of an Internet or electricity outage.”
Here’s how Robertson advises you get your business ready for when the unexpected happens.
Make Sure Your Business Continuity Plan Covers the Three Cs
Now is the time to ensure your business continuity plan is current, comprehensive and clearly actionable.
Though most commercial businesses already have a business continuity plan in place, for many it may have been drafted years ago. This matters: If a true outage occurs, your response may be inadequate or outdated.
Consider which types of emergency situations or outages are most likely to affect your day-to-day operations. And how can your team proactively prepare?
If a natural disaster were to occur in your region, keep in mind that everyone — your bank, your vendors and others you do business with — will also be affected. So it is essential that you plan for limited access to their systems as well—and getting back to normal could take some time. When Hurricane Harvey hit Houston, Robertson observes, it took two full weeks for most systems to stabilize.
As you revisit and refresh your business continuity plan, here are a few questions from Robertson that you can consider as you work to identify gaps:
- Have you established a manual process to run payroll or complete a wire transfer? Is that process clearly documented?
- How might you get in touch with your bank’s Relationship Manager if you don’t have phone service?
- If your Relationship Manager can’t be reached, do you have a back-up contact?
- How might you make a deposit if your bank is closed for an extended period? How will you monitor incoming wires? Will you re-route receivables to a different location? Or will you hold onto them until you can deposit them?
Set Up a Hot Site and Equip Your Team for Success
In the event of a network, electricity or equipment outage, you may consider establishing a “hot site” in a different geographic region. Hot sites allow you to move operations to an unaffected area so you can maintain business transactions and serve your customers.
Do what you can now to make the transition as seamless as possible. Depending on your area of expertise and industry, this could require duplicating data to the new location.
- Which systems and processes will you transition to your hot site? Which team members will need to travel there to lead the transition?
- Do you need to make an additional investment in servers or other data storage equipment so your hot site can handle operations?
- Is your hot site adequately prepared for employees to work efficiently and productively? Think furniture, supplies, office equipment and even snacks and water.
- Can your hot site location handle an influx of employees? For example, are there hotels nearby? What about a grocery store or a drugstore where employees can pick up essentials?
Spot Check Your Security — Even on Your Backup Processes
Multiple layers of security have become the norm in online banking and digital transactions. If you need to move to manual processes in the event of a disaster, keeping security front-and-center is ever more critical.
“You want to maintain the integrity of all the controls you have in place,” says Robertson. “Understand what the backup to the backup is.”
For example, Robertson recommends checking with your Relationship Manager to learn how your bank will verify your identity if you need to run payroll, accept a payment or run a wire transfer by phone. The person you know and trust could be affected by the same circumstances and perhaps be unavailable. The solution may be to dial a centralized service number. Ask them how the bank would validate that it’s you and initiate the transaction.
“It’s not a bad question to ask,” Robertson says. “This is a healthy discussion to have with your bank partner.”
Do this today so you won’t have to worry about security tomorrow. After all, an unexpected outage or emergency is already stressful enough.
If you’ve followed the recommendations and steps outlined above only to realize your business continuity plan needs to overhaul, Fifth Third Bank offers plenty of resources to improve your preparedness. Contact us to discuss how you can be better prepared for emergencies impacting liquidity. We can help you figure out how to best prep your business for times of uncertainty.