This article was originally published on Credit Union Times.
The United States is no stranger to natural disaster events. So far in 2021, severe drought, flooding, storms and wildfires have impacted the country in addition to the ongoing COVID-19 global pandemic.
In recent years there has been an increase in the frequency and magnitude of these natural disasters. According to the NOAA National Centers for Environmental Information, the U.S. has recorded $243.3 billion in damages the last three years (2018 to 2020), with 2020 seeing a total of $98.9 billion.
In the wake of these catastrophic events, the recovery process can take years. At the very least, catastrophic events tend to be followed by a six-to-nine-month tail regarding collateral damage. Proper preparation allows credit unions to perform damage control quickly, effectively and in compliance with applicable regulations.
This plan should consider all areas of your business, such as:
- Employees: Can employees get to work? Do you have alternative ways to get in touch with your staff members? Can your office remain open or can employees work remotely? Do you have access to adequate backup equipment to keep your business running? Did your response to remote work during the pandemic change how you will approach upcoming catastrophes?
- Data: Can data be accessed to continue managing the business effectively? Is your data backed up and secure? How will your data remain protected if damages occur?
- Service: If offices aren’t accessible, do you have a plan for continuing to serve your members? Have you informed your members about what’s going on and what they can expect?
It is important to evaluate how prepared your institution is in the event your property or members are impacted by a storm, hurricane, wildfire or flooding. While this is particularly pertinent for coastal establishments, any lending institution is at risk of being impacted by inclement weather, as your collateral may reside in any number of these affected areas. Developing a plan of action ensures your institution and members will not be completely caught off guard when it comes to communicating and taking the next steps.
Consider these three tips for best practices when it comes to catastrophe (CAT) planning.
Read the full article here.
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