For Diane - and anyone else interested in my bankgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I noticed your comment, Diane. Here's a brief summary of my bank's current Y2K status. Well, we've tested every single piece of hardware. We've tested all of the software used to process all transactions, from start to finish (advanced the dates at an off site facility and processed). We've tested with Federal Reserve various applications. We've tested with Freddie Mac for our secondary market loan transmissions and processing. We've tested every item necessary to conduct business - if it isn't necessary (Word to write memos), we didn't test it. At this point, we are focusing on Contingency Planning - that is to say we are preparing for items beyond our control (ie. electricity, water, telecommunications, etc.) To date, we have purchased a 100kw gasoline powered generator to enable us to continue to operate our internal processing system. We are making arrangements to have a supply of fuel for the generator as well. We are making arrangements for wireless communications, including "walkie-talkies" for lack of a more technical term. In addition, we have survied our material depositors and material loan customers, as well as samples from three age groups of depositors, attempting to determine their liquidity needs so that we can make arrangements to have a supply of currency ample to satisfy any increase in demand. We are also investigating delivery methods other than armored car since Fed has said that they will not be adding additional routes and drivers to their current armored car schedule. We will be making a decision on this matter very soon. We have made adjustments to our security procedures, should we need to enact the contingency plan. We are also developing plans to offer child care and/or family care services on site to help our employees should they encounter failures at their homes. We want our employees and customers alike to feel confident about our preparations. Finally, we are doing our best to inform our customers about our status and continuing progress. We are planning a town meeting type forum in August that will feature a speaker from Federal Reserve, hospital, grocery store, power company, etc. If you have suggestions, I am all ears. Thanks for your time again.
-- Diana (email@example.com), April 20, 1999
Thank you Diana!
Currently I'm with a very large, recently merged bank. Am thinking about switching to a smaller one.
The best one I EVER was a customer of, was a small community bank in Monterey, CA. They quite obviously cared about the surrounding community.
BTW, what kind of home preparation recommendations are being made to the employees?
-- Diane J. Squire (firstname.lastname@example.org), April 20, 1999.
As far as I know Diana - Yours is the ONLY bank I've heard of to this point that takes Y2K seriously enough to make contingency plans such as yours.
Glad I'm a customer. Your news is the only bright and comforting news I've read regarding Y2K.
I just wish Citibank would call you for consultation about how to handle Y2K RIGHT.
Keep us forum posters updated.
-- INVAR (email@example.com), April 20, 1999.
We have a "to do" list circulated around the bank that includes things like: alternative heat source (non-electrical), alternative water supply (including bottled water), canned or prepackaged food items, blankets, candles or other lighting utensils, etc. We are also stressing things like: mail all items prior to 12-31-99, schedule a medical/dental checkup near the end of the year (to give offices six months to catch up in 2000 if they have to), make sure you know where your family is on 12-31-99 and vice versa, if you have implanted medical devices or know someone that does - call your doctor now for a checkup, have a full tank of gas on 12-31-99, and many other items I won't bore you with. Again, suggestions are encouraged. Thanks.
-- Diana (firstname.lastname@example.org), April 20, 1999.
Where is your bank located at? I want to switch. Now.
-- Jon Williamson (email@example.com), April 20, 1999.
I attended a local (Shenandoah Valley) Y2k workshop this past weekend. The main speaker was a local bank executive/Y2K project coordinator. This exec is a definite GI.
As current FDIC regulations strictly prohibit bank employees from revealing ANY info regarding their own institutions Y2K rating as set forth by regulators, the exec had to speak around things a bit. Nonetheless, much was revealed.
This bank completed remediation prior to the end of last year. Testing is ongoing, both internally & externally. They fully expect to be as ready as is humanly possible.
Contingency planning has been quite thorough. I can't go into details at the moment, as I'm practically brain-dead from a lack of sleep.
Bottom line: I was very impressed with the bank exec's presentation. IMO he/she was completely honest with us. I feel the exec has a great deal of integrity. If I decide to leave some money in the banking system, I will switch from the Federal Credit Union I use currently to the execs bank.
Thanks for bearing with me, one neuron is not much to work with!
-- Bingo1 (firstname.lastname@example.org), April 20, 1999.
When did your bank start? And did they find they spent most of their projected budget?
-- Clare (email@example.com), April 20, 1999.
This is all great work in averting a failure of your own systems, a short failure of utilities, or a mild run on the bank. This gets you over the first couple of hurdles.
However, the big ones remain: what will you do if a large percentage of your loans go bad due to general business failures? If your retail customers default on credit cards or mortgages due to a rise in unemployment? What will you do if your derivatives contracts go nuts due to foreign utility or business failures?
There's no escaping the fact that banks are the crossroads of the economic system and see effects from all directions. I'm glad you are handling your own systems. But to pretend that Y2K cannot break the bank is just not realistic.
Assuming that my local bank can go under (banks still do, even in good times), it is perfectly reasonable for me to have cash to get me through until my account can be refunded by FDIC or somehow transferred to another bank (never having been through this, I have no idea how it works.)
Of course, I wouldn't expect those kinds of failures to happen at 1/1/2000. It would take a few months for that kind of damage to accumulate.
-- Michael Goodfellow (firstname.lastname@example.org), April 20, 1999.
We began our Y2K project in 1997. From the onset, the President and CEO made it clear to us that this project would receive the highest priority at our bank. Everyone on the Y2K Task Force worked with a sense of urgency. Our fantastic IT staff stayed untold hours testing and upgrading, then retesting equipment and software. Because we are a "small" (250 million in assets between the two banks of the holding co.)institution, we invest our income very conservatively. In an effort to get a handle on our credit exposure, we have interviewed our material commercial customers on at least two occasions since 1997 and have issued Y2K ratings to all of them. We also maintain a conservative loan loss reserve, more than required. I know I haven't impressed everyone on this forum - that wasn't my intention. But I honestly don't know what we haven't done. Aside from the liquidity issue which we are continuing to evaluate, I think we've done everything we can. If you can think of issues I haven't addressed here, I would appreciate the info. Thank you for your time.
-- Diana (email@example.com), April 20, 1999.
Whoops! I didn't answer a couple of your questions. My bank is Bank of Benton, Benton, KY. We have spent the majority of our Y2K budget, both money and time, on software testing. Because we had to take our internal processing software off-site to advance dates and run the tests, you can imagine the costs. Additionally, we found that several companies with which we do business really gouged us (and all of their clients) when it came to furnishing us with Y2K compliant software and testing assistance. Thanks again.
-- Diana (firstname.lastname@example.org), April 20, 1999.
Diana, what would have happened if your bank had not fixed y2k, could you have fixed on failure, did you find serious problems that would have led to business discontinuity, errors in processing, incorrect calcs/postings etc
would be interested to know, the same would probably apply to all other (similar) banks
interesting to hear about your other contingency plans, not many organisations over here would dream of taking such measures
-- dick of the dale (email@example.com), April 21, 1999.
I'm also interested, Diana, in your assessment of the banking industry as a whole.
From your perspective, IF we do experience Y2K-related problems at the turn and beyond, what do you think they are likely to be, and where do you think the banks could experience problems?
Thanks for all your openness. Every little bit helps us in better understanding your industry.
-- Diane J. Squire (firstname.lastname@example.org), April 21, 1999.
Began in 1997 - and are still testing in early 1999.
250 million, none of it wasted, and had the full support of the President and managers.
If your organization, your utility, your city, and your county and state governments are NOT giving an equal effort - look out!
-- Robert A. Cook, PE (Kennesaw, GA) (email@example.com), April 21, 1999.
We found many pieces of hardware non-compliant. Had we not made the effort to test this equipment, it would no doubt fall silent on 01-01- 00. However, the software itself, that processes all transactions and makes our customer account information available to us was compliant. Even if we had spent $0 on testing of software, I don't believe we would see processing errors. We simply weren't willing to chance that - we wanted to see the test results ourselves. Additionally, we have pushed our third party vendors very hard to comply with our timeframes. If they had no pressure on them, they may have acted much more slowly. As far as the industry itself, I have no doubt other banks are making similar progress. That's not to say that all institutions will buy a generator, but I know of several that have. No bank is willing to chance either their depositors nor the regulators on this issue. The public opinion alone would be enough to crush any bank that didn't make every effort possible to head off Y2K. This has been issue #1 in the banking industry. I did mean to say earlier that my institution is part of a two bank holding company with $250 million + in total assets - we have not spent that much on Y2K remediation. We have had a substantial budget however, spent mostly on testing software that was found to be compliant. (That and overtime of course!)
-- Diana (firstname.lastname@example.org), April 21, 1999.