By Ray Birch
MADISON, Wis.—If there is one thing the pandemic has done for credit unions, it’s forced them to toss out the window their “boilerplate” disaster recovery plans.
The reason: many of the plans credit unions previously had in place simply weren’t broad enough to address potential disasters, and that includes pandemic.
“I would say one positive from the pandemic is that credit unions are now recognizing there is a need to have a little more than just boilerplate disaster plans and policies,” said Chris Gill, CUNA Mutual Group senior manager, risk and compliance. “They are actually taking time now to customize those plans and policies and make them more comprehensive. They are looking for gaps and at worst-case scenarios, because a pandemic, previously, was considered so far-fetched.”
Gill recalled his own days working inside a credit union where the disaster plan did not address a pandemic.
Today, Gill emphasized he has seen credit unions respond to the pandemic by making quick adjustments to their plans to manage their way through the COVID crisis.
“I think the overall effectiveness of the plans in place before the pandemic arrived can be determined by the resources the credit union was able to dedicate to those efforts,” Gill said. “These plans are resource-intensive. I think a lot of the larger credit unions that have bigger teams, more resources to invest in different projects, had stronger business resiliency plans. I think some of the smaller and mid-sized credit unions felt the pinch here during the pandemic, because early on they did not have plans that were focused enough on a health crisis.”
Gill said he believes the biggest gaps in plans centered on technology.
“This would impact how credit unions effectively mobilized a remote workforce,” Gill explained. “There were issues, I became aware of, with some credit union teams and offices not having proper levels of network security, and even physical security.”
Few Business Impacts
Yet despite some hiccups with technology and plans, Gill said CUNA Mutual has not been made aware of any major business impacts to credit unions resulting from lack of preparedness for a pandemic.
Chris Gill
“We did not see a rise in claims due to the pandemic. We did not hear of member runoff,” he said. “But I know there was a need for many credit unions to pivot quickly in how they continued to serve their members.”
In addition to keeping more cash in ATMs, credit unions have also developed with some creative solutions to serve members.
“They did much more with their drive-ups, like offering a drive-up notary service,” said Gill. “They digitized a lot more of their regular services and leaned more on P2P and different online transfer platforms. I think they did a great job of being creative and filling needs.”
Overcoming ‘Weariness’
But Gill said despite some “weariness” on the part of credit unions to cope with natural disasters—which have been increasing in recent years with the onslaught of more wildfires in the West, hurricanes along the Atlantic seacoast and the Gulf, and tornadoes ripping through the Midwest—credit unions are not lacking in effort.
“Yes, the pandemic has made things worse,” said Gill about credit unions’ ability to cope with disasters. “But in all that I find among credit unions a renewed sense of resiliency. I think for some credit unions, when it came to their disaster plans, they had taken a check-the-box approach to those plans. I would say now credit unions are looking at business resiliency as a major component of their long-term strategic planning. That is the biggest turn I have seen from the health crisis.”
‘Part of our Fiber’
Gill added credit unions, especially in the Western U.S. where wildfires have raged from Colorado west to California, Oregon & Washington, were starting to look more closely at their disaster plans at the start of 2020.
“We kicked off 2020 with the Australia wildfires that have burned for almost a year. So, I think there's definitely this recognition by credit unions they needed to be more prepared,” Gill explained. “But I would simply say again that the pandemic was something that was so unprecedented—something that we were just not quite prepared for. But I think, now, credit unions recognize that business resiliency planning can’t be check the box or boilerplate. It has to be part of our fiber.”