By Ray Birch
CARMEL, Ind.—What feels like a growing number of natural disasters—and now a pandemic—have credit unions better prepared to deal with emergency situations in the coming years, according to one analyst who is also offering some additional steps to take to address the next unforeseen catastrophe.
Tina Love, vice president of claims and recovery at Allied Solutions, said she has witnessed credit unions respond to the pandemic by relying on their business continuity and disaster recovery plans, which have served them well since the COVID-19 crisis took hold in early March.
“I am so proud of credit unions for how they have performed during this health crisis,” explained Love, adding she does not believe credit unions are “weary” from all the disasters that have mounted in recent years in the form of tornadoes, floods, wildfires and hurricanes.
“Credit unions’ disaster plans have been strengthened from all of the disasters that have increased in frequency and impact,” said Love. “We did not notice any delay in claims being filed with us as the pandemic swept across the nation. I see that as a clear indication that credit union operations were preforming well.”
Smooth Transition
Love said what credit unions have done best during the health crisis is quickly transition to remote workforces.
“Credit unions have done a great job making this transition,” said Love. “Most of them were able to take their business continuity and disaster recovery plans and work remotely with very little interruption. And after about three weeks, giving them time to really get their feet under them in this new working environment and really organize themselves, they were working at a normal clip. Our credit union clients moved to Microsoft Teams, Zoom meetings, or whatever they needed to put that face-to-face with their interactions and it didn't take them forever to do it. They adapted very well.”
What helped many make a fairly smooth transition to a remote workforce, asserted Love, are business continuity and disaster recovery plans that have been strengthened in recent years due to the increase in severity and number of natural disasters, many—particularly flooding—reaching into areas of the country not typically hit hard by these tragedies.
The cost of disasters has reached almost $90 billion in a single year based on data from the National Oceanic and Atmospheric Administration, doubling the expense in five years from 2013 – 2018, Love said.
What really sharpened CUs’ disaster preparedness skills, said Love, was Hurricane Harvey, which included torrential rains and historic flooding so far inland that changed people’s perceptions. It created the realization that almost anywhere in the country can be affected by a disaster, she said.
Making Adjustments
Tina Love
Love pointed out while many of the BCP plans utilized by credit unions were not specifically pandemic plans, much of what has been added to the plans in recent years helped them during the COVID crisis.
“Credit unions were able to make adjustments with their plans and continue to work effectively,” she said. “Of course, there were some things their plans could not address, such as how you do repossessions during a pandemic—with all of the forbearances etc., and just the massive job losses across the entire country. You could not just go out and grab someone’s car. It just was not the right time to do that.”
Love acknowledged that in addition to credit unions having effective BCP and disaster recovery plans on their shelves, they have also exhibited a strong ability to adapt to a very unexpected event.
“Can you ever really prepare for a pandemic? I mean, not many people saw this coming,” said Love. “So, yes, there were some holes in some plans. And, you had some decision-makers whose lives were likely being impacted from the virus—either themselves or their families. But the key thing was being able to have a plan that allowed you to get your feet under you during the early days of the pandemic, and credit unions had that.”
What to Do Now
What credit unions have to do moving forward, suggested Love, is document all they can from what the pandemic has taught them.
“Do a complete lessons learned exercise,” Love recommended, “because this pandemic was likely not directly outlined in your business continuity plan. Now you know something like this could happen. Create a section in your plans directly related to addressing future pandemics. Learn from this terrible event, because now it’s clear you have to be prepared for anything.”
Love believes credit unions are ready for what might come next.
“You know, from the credit unions I have talked with, they now honestly feel they can handle anything after COVID-19,” she said. “Many of the other disasters—the hurricanes, the wildfires, the tornadoes now seem much simpler to deal with than a pandemic. I believe they feel that way because of the wide-reaching nature of this pandemic—how it has reached across the entire nation and affected so many aspects of all of our lives. And credit unions are not weary, they are ready for the next fight.”