Pandemic drill for financial sector finds planning gaps

Oct 26, 2007 (CIDRAP News) – The US Department of the Treasury this week announced the results of a recent exercise to test the resiliency of the nation's financial services sector in an influenza pandemic, revealing that few firms were well prepared and most needed to improve their all-hazards plans.

In May 2006 the White House directed the Treasury Department to work with banking and financial services companies to boost their pandemic preparedness, according to an Oct 24 department press release.

The exercise was conducted Sep 24 through Oct 12 and consisted of an online program of weekly scenarios and preparedness questions. The exercise was organized by two Treasury divisions: the Financial Banking Information Infrastructure Committee (FBIIC) and the Financial Services Sector Coordinating Council (FSSCC).

The simulation began with the World Health Organization announcing that human-to-human cases of H5N1 avian influenza had been reported in five major US cities, probably because of infected travelers arriving from Lagos, Nigeria.

As the pandemic progressed, the exercise described emerging impacts on supply chains, worker absentee rates, healthcare systems, schools, transportation, financial market indicators, and market reactions.

As the simulated outbreak spread across the country, companies were asked a series of preparedness questions on topics such as predicted absenteeism, the status of human resources plans for a pandemic, and plans for educating employees.

Questions specifically relating to financial operations, for example, included detailed questions about predicted automatic teller machine (ATM) availability and how the companies would respond if daily security trading hours were shortened.

As the exercise progressed, the companies responded to fluctuating market indicators and varying absenteeism rates. At the peak of the pandemic, the exercise simulated a 49% absenteeism rate. The last phase of the exercise centered on the nation's recovery from a pandemic, with preparation for a possible next wave of illnesses.

The Treasury Department said 2,775 organizations registered for the exercise; 65% were banks and credit unions, 23% security firms, 11% insurance companies, and 4% other groups (utilities, industry associations, and regulators).

"The strong public-private coordination on this exercise allowed us to reach more institutions than we ever expected," said Valerie Abend, the department's assistant secretary for critical infrastructure protection, in a press release. "And by allowing almost all participants to find critical gaps in their planning, this exercise was an unquestionable success in helping the industry prepare for such a crisis."

Of the participating organizations, 64% reported they had a business continuity plan for use in a pandemic, but only 42% said they had human resources policies in place to respond to employees' needs during a pandemic.

At the end of the exercise, the groups were asked how effective their business continuity plans were. Nearly 12% said their plans were very effective, 56% reported they were moderately effective, 28% rated them as minimally effective, and 4% said the plans were "not at all" effective.

Most (91%) said they would refine their business continuity plans on the basis of what they learned from the exercise.

Among other findings, Treasury Department officials learned that:

  • School closings as a community mitigation tactic during a pandemic would significantly or moderately affect about 72% of participating financial institutions.
  • Establishing a telecommuting system and dividing and dispersing work units were the two most common steps companies said they would take to maintain business operations during a pandemic.
  • Nearly 99% of respondents thought the exercise was useful for assessing pandemic preparedness.

As the planners analyze more of the exercise data in the coming months, they will release more detailed information on the pandemic's impact and the industry's response, officials said.

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