Financial firms confident about pandemic plans

The financial services industry is confident that it would be able to continue delivering essential services to customers during an influenza pandemic, even if 50% of the employees at firms didn't show up at their offices.

That is one of the key conclusions in a report released Thursday that assesses the results of what may been the largest pandemic planning test done in the U.S. thus far.

But the report -- which was prepared by the U.S. Department of the Treasury and two financial services panels, one an industry group and the other made up of government regulators -- does caution that even well-prepared telecommuting plans could face problems in the event of a pandemic. Specifically, it warns that increased use of the Internet by at-home workers, recreational users and other Web surfers likely would reduce residential-service throughput to just 50% of the normal rates because of bandwidth limitations in the so-called last mile -- the cables that connect houses to the Net.

The report distills the main findings gleaned from the pandemic test, which was conducted over a three-week period in September and October. The test forced planners at financial services firms to consider how their operations would fare if the avian flu began spreading rapidly among humans. Questionnaires distributed as part of the test generated a total of about 400,000 responses from banks, trading firms, insurance companies and businesses that offer clearance and settlement services.

In addition to raising concerns about performance problems for remote workers, the report challenges some notions about the importance of telecommuting's role during a pandemic. For instance, many small and midsize organizations said in the questionnaires that telecommuting isn't feasible for employees because their jobs can't be done remotely. Some also said that they don't have the necessary IT equipment to support telecommuting or that they're concerned about security issues.

One of the things that could help firms deal with a pandemic is cross-training of employees, which the report noted is a "long-standing" practice in the financial services industry.

"During the height of the [simulated] pandemic, a substantial majority of organizations across the sector reported that they had a sufficient number of cross-trained employees to conduct essential operations and to meet increased online customer demand," the report said.

Another issue raised in the report, though, is the fact that most of the companies that participated in the test -- 88% -- either didn't have stockpiles of antiviral medications such as Tamiflu and Relenza, or else had decided not to distribute them to workers. Instead, they relied on so-called personal protection equipment, which could include gloves and face masks.

The report said that companies "may wish to consider stockpiling and distributing antiviral medications, because they may reduce morbidity and mortality, and because they may diminish the overwhelming demands that will be placed on the health care system by a pandemic." But it also warned that there could be liability issues related to the distribution of the medications.

Pandemic planners consider a range of external issues, such as rolling blackouts and brownouts in urban areas. Ground mail and overnight delivery services also likely would suffer during a pandemic. Travel would be affected, with airline flights likely being reduced and fuel prices increasing significantly. Within the financial services industry itself, large numbers of bank branches might close, and trading hours could be shortened.

There are plenty of other unknowns -- for instance, how many workers would actually go to their offices? The report indicates that employers can't be certain of that. The test, it said, "didn't investigate the willingness of employees to come to work in the context of the dangers -- both real and perceived -- [that would be] posed by a pandemic."

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