Preparing financial institutions for coronavirus disease 2019 (COVID-19) | Nelson Mullins Riley & Scarborough LLP


Coronavirus disease 2019 (COVID-19) is the new disease currently disrupting travel and businesses across the world. Its appearance indicates that the time has come for your financial institution to consider preparing to respond to a pandemic or other potential disaster. Planning for a pandemic presents unique challenges for the management of financial institutions. Unlike natural disasters, technical disasters, malicious acts or terrorist events, the impact of a pandemic is much more difficult to determine due to the anticipated difference in scale and duration. Planning for a pandemic affects all areas of your financial institution and should include the board of directors, management, information technology, operations, human resources, legal and compliance. Financial institutions must be prepared to provide financial services in extreme circumstances, or in the face of public restrictions on travel or business, taking a proactive and conscious approach to health and safety. At the very least, your financial institution should use the sources and factors described below.

The Centers for Disease Control and Prevention provided Interim Guidance for Businesses and Employers to Plan for and Respond to Coronavirus Disease 2019. The CDC recommends the following strategies for employers:

  1. Encourage sick employees to stay home if they have symptoms of respiratory illness, including fever, cough, or shortness of breath. This includes making sure that leave policies are flexible and allow some employees to work from home.
  2. Separate employees who show signs of symptoms when they arrive at work or who become ill during the day. Every effort should be made to balance the obligation to provide a safe workplace with the obligation of confidentiality that may be owed to those concerned.
  3. Emphasize staying home when an employee is ill, germ prevention techniques, and general hygiene. This may include emphasizing the need for employees to cover coughs and sneezes, regularly sanitize their hands, and wash their hands regularly.
  4. Periodically clean areas that may contain germs, including doorknobs, workstations, teller lines, desks, telephones, and counters.
  5. Stay up to date on areas of coronavirus concentration and act intentionally with employee travel.
  6. Advise employees who have a sick family member at home to self-isolate until the family member’s illness can be identified and treated.

The CDC has published an excellent Workplace influenza pandemic planning checklist which includes tasks identified for a large company given its response to an influenza-like pandemic. In addition, FEMA has created a business continuity model template help organizations integrate influenza-like pandemic considerations into business continuity planning. Overall, your financial institution should focus its plan on the following key areas of risk:

  1. Reduce transmission between employees of financial institutions,
  2. Protect people who are at higher risk of unwanted health complications such as the young, the sick or the elderly,
  3. Maintain business operations in light of employee shortages or customer limitations, and
  4. Minimize negative effects on customers of financial institutions.

When you consider your financial institution’s intervention plan, you must:

  1. Identify possible occupational exposures and health risks for your employees. The most likely risks to the financial institution include the risk of transmission from other sick employees or through interactions with customers of the financial institution.
  2. Review human resources policies to make sure policies and practices are flexible. Encourage employees to stay home when they are sick, when a family member is sick, or when there is a potential risk to the financial institution.
    1. Establish policies and practices such as flexible workplaces (for example, telecommuting) and flexible working hours (for example, staggered shifts), to increase the physical distance between employees and between employees and others if national and local health authorities recommend the use of social distancing strategies.
    2. Encourage employees capable of teleworking to do so instead of coming to the workplace, at least until the risks are fully controlled. Test now to make sure you have the information technology and infrastructure to support multiple employees who may need to work from home.
  3. Identify the essential business functions, essential jobs or roles and critical elements within the financial institution required to maintain business operations (ie information technology, management, compliance). Plan how the financial institution will operate if absenteeism increases or if certain groups have a high absenteeism rate (i.e. no IT staff).
  4. Put in place authorities, triggers and procedures to activate and terminate the company’s infectious disease outbreak response plan and modify business operations. For example, modifying or possibly closing operations in the affected areas, such as a “drive through only” model.
  5. Establish a process to communicate information to employees and customers in the event of restrictions or limitations. Plan now to anticipate employee fear, anxiety, rumors and misinformation, and plan communications accordingly so messages are clear to your employees and customers.
  6. Determine how the financial institution will continue to operate if early childhood programs and K-12 schools are terminated. Particular attention should be given to plans to address spikes in absenteeism due to increasing numbers of sick employees, those who stay home to care for sick family members and those who must stay home to watch their children if they are expelled from school.
  7. Cancel non-essential business travel according to the travel advice on the CDC website.
    1. Implement a process to deal with government-imposed travel restrictions that may limit the ability of employees to return home if they become ill or impact key business operations.
    2. Cancel important or non-essential work-related meetings or events.
  8. Collaborate with national and local health services. Confirm communication channels and methods of disseminating information on local outbreaks.
  9. Integrate advice provided by public health officials. Local conditions will influence the decisions public health officials make about strategies at the community level; financial institutions should take the time now to learn about the plans in place in each community where they operate.

Also consider the following relevant guidelines issued by prudential financial regulators:

(2008) Interagency statement on pandemic planning. In line with CDC guidelines, the interagency statement emphasizes sustaining business operations in the face of such challenges. It is important to note that reviewers will be looking for a documented strategy to respond to a pandemic. As part of this plan, the financial institution should have:

  1. Preventive programs to minimize transmission to employees and customers.
  2. An employee training program on the particular pandemic and the risks associated with transmission.
  3. A maintenance strategy for the company’s facilities, systems and procedures. This strategy should include information regarding social distancing, telecommuting, electronic banking, alternative sites or alternative delivery strategies. In addition, the financial institution should consider what would happen due to increased demand for ATMs, online banking, mobile banking and call centers.
  4. An assessment of potential business disruption and how the financial institution can mitigate the severity of that impact.
  5. A testing program to determine the effectiveness of the strategy.
  6. A map of key customer activities and how these or other facilities, systems or procedures can be maintained in the event of a pandemic.

(2019) Update Business continuity management The guidelines (“BCM”) include additional obligations for financial institutions responding to the challenges of essential financial services. Although they do not deal specifically with pandemic events, these guidelines provide a useful framework for any financial institution structuring its pandemic response programs.


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