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How FIs can prepare customers for a natural disaster

November 5, 2012 by Thomas Hailey — Director of Business Development, CORD Financial Services

Amid advanced payment methods, automatic online bill pay, mobile money transfers and credit card transactions, we sometimes forget that technology can be fickle. We also sometimes forget that in times of crisis, cash can become a dependable resource — and even a lifesaving necessity.

Banks and credit unions, which are required by regulatory agencies to have comprehensive disaster relief plans and secure backup networks. Still, they know that the immediate challenge during unexpected emergencies and power outages is making sure that customers have access to banking services — and cash. 

The aftermath of Hurricane Sandy is a perfect example of this challenge. But a truth that's often overlooked is that an FI can help its customers to get cash-ready for any emergency by reminding them of the number-one rule for financial security during a natural disaster:

Withdraw cash early.

This cannot be stressed enough. By withdrawing enough cash to sustain themselves and their families through a disaster, your customers can literally save lives. This is why the American Red Cross lists “small bills and change” among the 14 basic supplies in any emergency preparedness kit.

One of the greatest services an FI can provide its customers is a reminder of the critical importance of being cash-ready before the possible onset of seasonal weather events — tornadoes, snowstorms, hurricanes, mudslides, brush fires, or whatever dangers their particular climate and geography might bring.

A statement stuffer or notice posted to an FI's landing and login pages can remind customers of important cash-access issues they should think about before disaster strikes:

Outages and transaction limits — Remind customers that ATM operators cannot accurately predict a surge in cash demand during an emergency. The Washington Post said that during Hurricane Sandy, 200 of the 2,000 ATMs operated by M&T Bank lost power, and one in New York’s Hudson Valley ran out of cash. And getting cash back with a debit card transaction might not be a sure thing, either. The Harris Teeter in Adams Morgan, which generally allows customers to take out up to $200 using their debit cards, limited cash-back transactions to just $50 in the wake of hurricane Sandy.

Bank branch closures — Advise customers that backup systems can't always be relied upon. Earlier this year, Maryland-based Sandy Spring Bank, prepared for large storms by bringing in backup generators and extra diesel fuel to keep them running. But when thunderstorms swept through the region earlier this year, 20 of the bank's branches still lost power for up to four days.

A threat such as a hurricane generally allows plenty of lead time for people to prepare for disaster. In the case of Hurricane Sandy, this would have afforded FI's the opportunity send out email or SMS notices to customers with a reminder to withdraw enough cash to see them through several days of ATM and branch outages.

You can also encourage your customers to take this quiz to find out how well prepared they are for an emergency. And don't forget to take it yourself.

About Thomas Hailey

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