Banks Ready Disaster Plan in Wake of Coronavirus

Large US banks have begun testing crisis measures in case of a broader coronavirus outbreak that prevents staff from going to work, according to banking sources.  JPMorgan Chase, Morgan Stanley, Goldman Sachs and Citigroup have asked hundreds of workers to work from home as part of emergency preparedness.  They are asking some employees to work from home over the next two weeks so they “can test systems and remote access.”

JPMorgan has undertaken tests at a disaster recovery site in London and two in the United States, in Brooklyn and New Jersey.  Citigroup has undertaken a similar process in London and New Jersey, while Goldman Sachs has done tests at a site in London.

“We have recovery sites and we continually test them,” said a Goldman Sachs spokeswoman. “As you can imagine, we are enhancing our testing in view of the coronavirus.”

The banks want to be able to assure consumers that services won’t be affected if employees must work from home.  The companies have added computer programs to simulate remotely the systems used by financial traders, sources said.

There has also been extensive testing of disaster recovery sites to ensure the same quality of service as at the office. While working remotely is relatively straightforward for administrative staff, there are more challenges for traders and sales force employees.  These include issues with the quality of home Internet service, as well as the sophistication of information security systems and whether networks are shared with other family members.

There is also a need to maintain sufficient oversight of traders and commercial workers to meet regulatory requirements.  Banks must keep records of phone and written communications of traders and they can be fined if they don’t follow the rules.  Firms have asked regulators for flexibility on the rules, confirming a report in the Financial Times.  U.S. authorities have relaxed rules in early disaster-type scenarios, as in 2012, when Hurricane Sandy battered the New York region.

Source:  AFP