Flu Pandemic Test Not Necessarily an Exercise In Futility

We haven't heard too much this year about the flu pandemic. News of isolated outbreaks have been few and far between when compared with the feverish reporting during the earlier part of the year and 2006. However, the idea of a pandemic is still fresh in the minds of the financial services industry and the U.S. government as they gear up for a wide-scale test later this month called the FBIIC-FSSCC Pandemic Flu Exercise of 2007.In June, senior editor Nancy Feig wrote about this very subject and examined just what this exercise would entail and gauge how ready banks' IT systems were to handle a massive outbreak. The test was mandated by the federal government to ensure the U.S. financial system would escape relatively unscathed should thousands of people fall ill. The exercise will occur online via a website hosted by the Securities Industry and Financial Markets Association (SIFMA). It is set to begin Sept. 24 and will run for three weeks. Participating financial institutions will be faced with a series of scenarios that they must play out. Results will be used to determine how best to deal with such things should an actual pandemic occur.

What made me decide to revisit the subject was that I found a post about the test on Slashdot. It's not often that I find banking-related posts on this very tech-heavy news site, but when I do, I think it's interesting to study the reactions from the readers. After all, Slashdot does claim to be the source of "news for nerds" and I like to see what they have to say about financial services industry.

Feedback varied, of course. Most of it seemed a bit on the cynical side. Many said outright that they don't think there is any use to banks performing a test like this. One person even said we should see how well companies hold their own during a zombie infestation.

Despite the naysayers, there were others who did find merit in the idea of a pandemic testing program. One reader said he once worked in the IT department at a financial institution that performed a disaster recovery test where employees drew colored marbles at random that determined whether they were "infected" or fit to stay at work. Infected individuals were sent home and the company operated at significantly lower staff levels. Although the reader says IT did a stand-up job operating at 50 percent capacity, if it came to do anything more than simply "keeping the boat afloat," he wasn't quite so sure the systems could handle it. He closed his post lamenting the fact that his current employer never considered performing similar tests.

Another reader said his company had some "pandemic awareness training." However, it was more of a half-baked effort that caused the person to conclude that his company would be "screwed" if something real were to occur.

Any disruption to the financial system is cause for worry. Of course, a massive outbreak of disease is quite different from a wide-scale power-outage or cyber attack on our banking system. However, even with all the automation we have today in banking, there are actual human beings who ultimately make sure things operate smoothly. What happens if there are fewer people to restock the cash in ATMs? What about call center agents? A bank could face a customer service/reputational nightmare if it is unable to field questions from frantic customers. Servers go offline. Someone needs to fix these things so online banking operations can still function and people can still use their card cards.

A test in some form probably is a smart thing. The exercise may not be perfect. There may be some holes in it. However, the financial services industry should be commended for this first attempt at studying what could be a looming problem.