Bankers GET IT and Are Listening!!!!!!!greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I feel I can finally make a worthy contribution. I was checking out information on how a bank would respond to a run. Anybody know? What are thier action limits? What would a bank be doing when thier cash reserves get low? How about very low?
Anyway, I found this web site while searching.
They do have a Y2K page with lots of information. I began reading a few articles.
in the paranoia article they had a most interesting link
WOW!!! It is a thread off this very board!!!!!!!!
Read the thread, it was some well done research, and it got the bankers attention.
I will not post the articles as the are long. Please read them and see what you think. Anybody know the answers I was looking for? I was wondering about early warning signs ie odd behavior, new rules, keywords, etc to be on the lookout for.
-- Mike (email@example.com), February 09, 1999
No odd behavior in my neck of the woods. This works to my advantage and anyone else who is awake. But, sad to say, my coworkers are still asleep. :(
-- dinosaur (firstname.lastname@example.org), February 09, 1999.
Absolutely go and look!! this is a great site (on cursory exam)!!
-- Chuck, night driver (email@example.com), February 09, 1999.
Combating Customer Paranoia . . . Before the Year 2000 by Jody Noerdlinger
Here it is: the beginning of 1999. As the last year of the millennium begins, you smugly review your Y2K preparedness. You've obtained the FDIC's customer brochure, and you're right on track with contingency planning. The millennium bug? No problem! When the clock strikes midnight on December 31, 1999, your bank will be sitting pretty. Unless, of course, in the last days of 1999 you had a run on cash, due to the fact that a number of your customers withdrew their funds in a total panic, and you did very little to prevent their paranoia.
Y2K customer paranoia -- is it for real? You bet! And that clock is ticking, so find out now how you can assuage the fears of account holders who believe their banks will fail them when the Year 2000 arrives.
Not long ago, a banker friend of mine related this alarming anecdote. His mother -- we'll call her Mrs. Black -- is frightfully worried by the impending Year 2000 Problem. She's convinced that if she leaves money in her account it will either disappear, or she'll simply be unable to access it.
"Oh well, another uniformed and, thus, paranoid customer who'll probably close out her account," you say to yourself. "Not to worry. Every bank can expect a few of those." But wait a minute --this customer has $650,000 worth of inheritance in CDs that are due to mature in late 1999. Will any financial institution ever reap the benefit of those dollars? Certainly not! Mrs. Black intends to keep the money herself instead of entrusting it to her bank where she feels it's at risk of being devoured by the millennium monster.
This case sounds somewhat extreme, but think of all the ordinary account holders who are experiencing pangs of paranoia about Y2K, fueled in part by the media's relentless attention to the problem and in part by the lack of technical knowledge and expertise from which many of us suffer. These customers lie somewhere between the die-hard survivalist and the simple money-under-the-mattress mentality.
Take a woman whom I'll call "Sally." She's highly intelligent, well-informed and ultra techno-savvy. But what's her response to the approaching crisis? A few days ago, she confided to me that she's going to stock up on canned goods. "Canned goods?" I asked with disbelief. "Yeah. You know -- stuff in cans; they have a long shelf life. I'm going to buy now so I can get what I want and avoid lines at the supermarket later on. Just look at what's on the news. Hear it enough and you'll start to believe it. I even know bank examiners who plan to withdraw at least a few thousand in cash, just in case," she replied, implying of course that she intends to do the same.
And if those examples don't convince you that everyone has concerns, then listen to this: People magazine reports that even Barbra Striesand is leery of what might happen on New Year's Day, 2000. She's cancelled her scheduled December 31, 1999, performance at Madison Square Garden. Instead, she'll be singing at the MGM Grand in Las Vegas, much closer to her home in Los Angeles, in case of Y2K-related airline problems.
What's going on here? Why are intelligent people with access to the facts on the verge of panic? You'll understand much better when you see the kind of information being disseminated. If you examine what's being said about Y2K, it's no wonder that even those who were originally skeptical of the problem are nearing hysteria. For example, self-proclaimed Year 2000 expert Gary North writes on the front page of his Web site,
Months before January 1, 2000, the world's stock markets will have crashed. Who is going to leave his money in his bank if he thinks his bank's computer is not reliable? A worldwide run on the banks will create havoc in the investment markets. People who have placed their retirement hopes in stocks and mutual funds will see their dreams vanish. How reliable will stocks and mutual funds be if the banking system has closed down? How will you even get paid? How will your employer get paid? How will governments get paid?And North is not the only one. Here's a quote attributed to the well-known Peter de Jager who's written several books and numerous articles, as well as appeared on the Discovery Channel, Inside Edition, ABC's Nightline and CNN's Crossfire, discussing the subject of Y2K:
I will leave you to contemplate what happens to the world-wide economy if businesses lose the ability to do business. We have no time for unjustified optimism. Nor have we time for cautious optimism. We have time only for a highly accelerated sense of urgency, a meager allotment of time rapidly slipping away.This kind of discourse has fueled the wildfire of Y2K paranoia. You may see it as propaganda, but there are a number of others out there who take the idea of impending doom quite seriously, many of them advocating the idea that financial institutions are under major risk.
Intelligence Report, a publication of The Southern Poverty Law Center, gives this quote from the Web site of right-wing Christian author Tim La Haye: "It could very well be a financial meltdown...leading to an international depression, which would make it possible...to establish a one-world economic system, which will dominate the world economically until it is destroyed."
Or check out the Y2K Supply Web site. There you'll find a petition requesting you to support efforts to pressure the federal government and private banks into increasing cash reserves. The petition states, "Banks currently hold cash reserves of around $44 billion. But results from several polls...indicate that frightened customers...may withdraw up to 10 percent of their deposits, or approximately $370 billion in cash." The site's author (who chose to remain anonymous) goes on to describe in painstaking detail the failings of our financial organizations to meet the fiduciary challenges of Y2K.
Naturally, there are a wealth of books on the market that cover this topic. Increasingly, the titles cater to the fears of the average person, the family, the city dweller -- your depositors, in other words -- rather than to computer experts or those with software, hardware or vendor concerns. Here are a few of those listed in the Bookstore of Peter De Jager's famous site, the Year 2000 Information Center: The Y2K Personal Survival Handbook, How to Survive Y2K Chaos in the City: A Preparedness and Self-Reliance Handbook, Y2K Survival Handbook for the Urban Family and Y2K: How to Protect Your Family in the Quiet Crisis. All of these books can easily be found on Amazon.com, along with dozens of other titles on various aspects of Y2K gloom and doom.
A recent, lengthy Boston Globe article quotes a Gartner Group survey rating the preparedness level of entities subject to Y2K difficulties, for example local governments, health care, oil and gas: "'Among the best were financial institutions.'" But, in the same breath, Gartner's vice president and Director of Research urges that each of us should have "at least two weeks salary in cash." The article also quotes a computer technician with Michigan-based Sophisticated Systems, Inc., who is planning to withdraw at least $30,000 in cash reserves.
In other words, it seems that no one's immune from the onslaught of Y2K fearmongers, and no one is likely to survive January 1, 2000, without at least a smidgen of doubt concerning the stability of our societal underpinnings, especially financial institutions.
Even Alan Greenspan -- that oracle of economic information -- does some pretty energetic equivocating when it comes to predicting what the Year 2000 will bring:
The bottom line is that we really do not have the analytical capability to make judgments on what the effects will be on the economy as a whole. Obviously, it is a negative. Whether it is a small negative or a significant negative, I know of no way in which we can make that judgment in the manner in which we would have confidence in the forecast.So is Doomsday on its way, and bankers might as well accept the inevitable? Or can you take an active role in combating the waves of paranoia that appear to be crashing over the populace? There are ways to reduce panic and help prevent your customers from heading for the hills, cash in hand.
Head Them off at the Pass
Most banks haven't received numerous customer questions -- yet. So, first of all, realize the importance of heading off trouble before it happens. If you can allay the fears of customers now, before they're bitten by the Millennium Bug, you'll save yourself a lot of trouble and anxiety come the latter months of 1999.
Take a look at a couple of solutions banks have come up with to ward off the Y2K demons lurking in the shadows.
Y2K Coordinator J.P. Fitzgerald at American Heritage Bank in El Reno, Okla., explains that lobby posters created by the bank's marketing department have helped raise customer awareness. Likewise, the message customers receive over the telephone while on hold subtly reinforce the fact that American Heritage is on top of the situation. Early in 1999, the bank will hold a question-and-answer seminar for commercial customers, complete with an ABA video that outlines the steps businesses can take to ensure readiness.
Pam Korth, chairperson of the Quail Creek Bank of Oklahoma City, Y2K Committee, thinks brainstorming is a highly valuable tool for anticipating customer concerns. She and her committee members toss around ideas at least twice a month. Korth believes it would be difficult to understand and address the personal aspects of Y2K without the advantage of group input. Her committee's brainstorming sessions generally result in several good ideas that are communicated to customers via quarterly statement stuffers.
In addition, according to Michele Petry, technology consultant at The Kentucky Bankers Association, these are some typical activities that most banks are presently engaged in:
The Power of Language
- Holding public information sessions to help customers understand Year 2000-related risks
- Explaining what steps the bank has taken to be ready for Y2K
- Working with other businesses, community groups, and utilities to ensure they'll be ready to operate as usual in 2000
- Alerting customers that withdrawing funds may mean they are at greater risk of robbery
- Being available and prepared if the media asks for comments on the bank's Y2K preparedness
- Speaking to community groups about Y2K
At the same time, be aware that your customers won't necessarily comprehend the Year 2000 Problem through osmosis. That is, although they've probably heard the term numerous times, they might not understand exactly what it means, how new software and hardware can fix the problem, where the government stands on taking responsibility for preparedness, and when the public can expect to reap the benefits of the banks' hard work. So don't inundate them with meaningless generalities or confuse them with lengthy and complex explanations; make sure you provide relevant information they can easily understand.
Take, for example, the year-end statement stuffer designed by a major brokerage firm. At first glance, it appears to be pretty much a no-brainer. Only the words "Year 2000" adorn the front, and it uses simple, boldface headings to designate all the major issues like regulatory requirements, vendor readiness, hardware compliance, testing, data providers and staffing. But its very simplicity commands attention, and the content is thorough, but concise.
In fact, what makes this brochure stand out is the quality of the information provided -- straightforward language and sound explanations rather than technical jargon and overinflated prose. There are no exaggerated promises or flashy graphics to detract from the importance of the issue at hand. Customers will immediately see the difference between information like this that provides good, solid facts and the distortions promulgated by Y2K propagandists.
The message here? Evaluate your educational materials in terms of your audience. Have a 16-year old read your Y2K statement stuffer. Ask a senior citizen to look over your brochure copy with a critical eye. Do both understand equally well the ramifications of Y2K for them and for you? You have a broad customer base with diverse needs, all of whom, as depositors and clients, deserve to understand the status of their financial holdings. Choose wording that will truly inform and educate them.
Attitude Adjustment Necessary?
Finally, a good attitude goes a long way. Make sure all those who answer questions and disseminate information do so in a calm, rational and reassuring manner. When a customer demands to know what will happen to his or her funds come Jan. 1, 2000, it's important that your bank responds with authority, honesty and sensitivity. Here's a conversation produced recently by a random call:
Customer: I just saw a television program about the bad things that will occur in the Year 2000. Can you tell me what's going to happen to my money?
Bank: Well, I really don't know the answer to that question. Could you hold for a moment, please?
At least four minutes later.
Bank: Hello? Who were you holding for?
Customer (exasperated): I've been waiting to talk to someone about the Year 2000 problem.
Bank: Oh. Could you hold please while I try to find the person in charge?
Customer: Sure. I guess I don't have any choice.
Two more minutes go by.
Bank: I'm the assistant to the Y2K coordinator. What can I help you with?
Customer: I'm worried about the Year 2000 problem, and I've been trying to find out what will happen to the money I have deposited with your bank. Is it at risk? Is there anything I should do to make sure my money's safe?
Bank: Well, right now, I wouldn't worry about it if I were you. It's kind of early to be concerned. This is December 1998, not December 1999, you know.
Although the dialogue is not exact, a conversation very similar to this did occur. Did the bank respond in a reassuring, trustworthy way? Of course not. The poor service and nonchalant attitude of the Y2K coordinator's assistant could easily baffle and alarm the customer. Instead of instilling trust and confidence, this scenario creates more of the same paranoia that banks should be warding off. Yet it's a perfectly plausible response to an unanticipated question if the bank isn't currently thinking in terms of customer paranoia.
At a recent conference on electronic commerce, a partner with Deloitte and Touche who handles security concerns asked the audience what a bank's most important asset is. No one responded immediately, so he prodded the group a bit: "Is it the buildings? The securities? The funds? The employees?"
"Actually, it's none of those," he said. "Trust is a bank's biggest asset. Without their customers' trust, banks would have no business." He's right, you know. As the Y2K frenzy mounts, maintaining that trust is vitally important. And one way to do it is to make sure that everyone in your bank can communicate in an intelligent, meaningful way about the Year 2000 Problem, presenting a unified attitude that exudes confidence and security.
But do your customers really notice what you're saying? Do they really care? You can gain some insight into those issues if you take a look at this excerpt from postings on a Web site called Time Bomb 2000 Q & A. Here, it appears that not only do people notice, but they're taking the time to discuss and evaluate one bank's efforts to communicate that sense of trust.
Do It Now; Do It Often
You've heard the wild examples. You've read the stories. You understand perfectly the nagging doubt created by negative press. Just turn that understanding to your own advantage by counteracting with a positive message at every opportunity. The more you impress upon the public that you're ready and willing to discuss the issue and that you've done everything in your power to supply accurate and forthright answers, the more you'll prevent customer paranoia. For example, an article entitled "Banks Calm Fears About Y2K Glitch" recently appeared in the business section of The Sunday Oklahoman. It features the Oklahoma Bankers Association president, who assures readers that testing is ongoing and contingency plans are underway. Taking advantage of similar opportunities provided by the media is bound to enhance the image of the banking industry and emphasize its concern for the public it serves.
The same People article that reported on Barbra Striesand's fear of performing in New York on New Year's Eve, 1999, claims that The Rolling Stones have no such qualms. They're fearlessly taking over her Madison Square Garden date. Thank goodness The Stones are Y2K-informed! I wonder who their banker is...
First published on bankinfo.com on 1/4/99
-- Mr. Paranoia (firstname.lastname@example.org), February 09, 1999.
They don't get it. The article reeks of the blame game that the government is playing with the GI's.
"Increasingly, the titles cater to the fears of the average person..."
"In other words, it seems that no one's immune from the onslaught of Y2K fearmongers..."
"Why are intelligent people with access to the facts on the verge of panic?"
"...the ordinary account holders who are experiencing pangs of paranoia about Y2K, fueled in part by the media's relentless attention to the problem and in part by the lack of technical knowledge and expertise from which many of us suffer."
So, we're experiencing "paranoia" because of the "Y2K fearmongers" and despite having "the facts," we can't understand because we have a "lack of technical knowledge." Ummm... Okay...
-- d (email@example.com), February 09, 1999.
Mike sounds like a troll. Two or three threads down gives him away also.
-- (firstname.lastname@example.org), February 09, 1999.
*sigh* Mike you need to redefine what you mean by "get it" - all this proves is that bankers understand that they don't control their customers, and this bothers them.
-- Arlin H. Adams (email@example.com), February 10, 1999.
I've just spent the last 15 minutes or so at the above links. I found something I'm sure all of you will want to bookmark.
Current Y2K news articles helpful to the banking industry:
I'm going to start visiting this URL every single day!
-- Kevin (firstname.lastname@example.org), February 10, 1999.
Me too, Kevin, thanks "Mike"!!! I guess I can go back to sleep now.
-- me (email@example.com), February 10, 1999.