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Will Your CU Be Ready When Disaster Strikes?

A board's comprehensive recovery plan must expect the unexpected.

September 02, 2014
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Tornado - disaster preparedness

Only about one-third of small or medium-size U.S. businesses have a comprehensive disaster recovery plan, according to Gartner, a technology and research advisory firm.

That statistic doesn’t surprise Paul Sullivan, vice president and general manager at Agility Recovery, a CUNA Strategic Services alliance provider. He’s often surprised by how many credit unions don't have a recovery plan in place.

CU Directors Newsletter“I always look at credit unions as being the backbone of the community,” he says. “You should be there to protect the members, no matter what.”

September is National Preparedness Month, so Credit Union Directors Newsletter sought insight from Sullivan about issues boards should consider when assessing their business continuity capability and approving their NCUA-mandated recovery plans.

Q What are the key elements to a successful disaster response?

Sullivan: First, you need a plan. But a plan is just a piece of paper.

Second, you also need a place to go should your facility become unusable. That mitigates risk because you need to restore operations as quickly as possible. You don’t want to put doubt in anyone’s mind because it’s far too easy for consumers to take their business elsewhere.

Agility Recovery Preparedness
Webinar Series

Agility Recovery, a CUNA Strategic Services alliance provider, is hosting a series of free educational webinars on the topic of organizational preparedness and resilience. All webinars will be held from 2 to 2:30 p.m. Eastern time. Information and registration

Sept. 3: Crisis Communications for any Organization. Learn the most critical steps and best practices for developing an emergency communication strategy. This includes both internal and external communications, and applies to emergencies of all types, large and small.

Sept. 10: How to Plan for a Power Interruption…and Recover Fast. Nearly 70% of businesses in the U.S. will lose power sometime in the next 12 months. Hear about top strategies to mitigate this threat and best practices for a swift and efficient recovery.

Sept. 17: The Top 5 Steps for Preparedness This Year. Prepare for interruptions based on the most recent disasters and those most likely to occur. Implement suggestions that could mean the difference between surviving a disaster and succumbing to one.

Sept. 24: If You Do Nothing Else This Year... Leaders simply cannot afford to overlook the risk disasters pose to their organizations and daily operations. Learn some simple ways to build your resilience as an organization with minimal commitment of time and resources.

And third, you must test the plan. That can be as simple as a tabletop exercise—bringing in all the stakeholders, running through a scenario, and making sure everyone knows their roles and responsibilities.

Rather than calling it a “test,” call it an exercise. A test says pass or fail. With an exercise, you can learn from it, and enhance your capability.

Q. Besides natural disasters, what other events should CUs anticipate?

Sullivan: The majority of what we see are isolated incidents. At one financial institution, a $2 nut that connects a water pipe to a second-floor toilet failed and the entire first floor flooded.

Credit unions are always updating or remodeling, and that typically means closing the branch for some time. But what if work crews find asbestos and they need to take abatement measures, and you can’t get back into the facility?

The biggest thing we see is power outages, which often are completely unrelated to the credit union. We’re so reliant on the network these days, whether it be phone or Internet. How do you restore your business if you don’t have access?

Q. How do you construct a plan that assesses every possible scenario?

Sullivan: Any plan has to be flexible, and it has to be a guide.

Are there going to be things that happen that we didn’t think about? Absolutely. But with a good plan, you can adapt quickly.

Another key is spreading responsibility. In a lot of organizations, leadership will turn to somebody—whether they’re in security, information technology, or risk management—but no one person can handle that.

An effective program must be built with a team in mind, and you must have management support to test it and implement it, if necessary.

This article initially appeared in Credit Union Directors Newsletter, which provides strategic insights for policy makers. Subscribers can choose to receive the print edition or PDF version.

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