Pub. 9 2020 | Issue 4


Leaders Ledger: Practicing Your Best Practices in a Pandemic

The last few months have put stresses on banks in ways that could not have been previously imagined. It is easy for bankers trying to meet the needs of distressed customers to lose sight of day-to-day responsibilities. However, it is during a crisis that our best business practices become even more important. These practices not only help to keep staff on task, but they can improve a bank’s ability to operate during the crisis. Some of the best practices that should be maintained during the pandemic are:

First, make sure that every employee position has been adequately trained and cross-trained. Day-to-day staffing is the big unknown with positive diagnosis and quarantine requirements occurring unexpectedly. Your bank does not want to find itself unable to complete required tasks because the only person who knows how to do the job is quarantined. Regulatory risk can be reduced by making sure that staff has been adequately trained and cross-trained.

Second, stick to your audit schedule. Examiners have notified banks that risk identification and management is going to be the focus of upcoming exams. This means banks need to identify weaknesses caused by the pandemic in investments, loans, regulatory compliance, and operations before the examiners discover them. The only way to identify these risks is to review what you are doing and how you are doing it. It is tempting to delay audits for a more convenient time, but the reality is that no one knows how long this crisis is going to last, and waiting for a more convenient time may mean waiting for a time that never comes.

Third, in maintaining the bank’s audit schedule, be prepared to have the audit completed remotely. For the time being, on-site audits are not going to be possible in most banks. This means the bank and the auditor must be able to exchange documentation using remote access. If hiring an external auditor, make sure the auditor can quickly transition from on-site to remote audits, and that the auditor has a system that provides for secure document exchange and storage. Vendor due diligence is key.

If you have any questions as to these best practices or other legal and compliance issues facing your bank, contact the KBA Legal Department. We are here to help.

By Terri Thomas, SVP-Legal Department Director

This story appears in Issue 4 2020 of The Kansas Banker Magazine.

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