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What is your plan for recovery should disaster strike your financial institution? In order to meet FFIEC compliance, your bank must exhibit the ability to resume normal business function quickly. If your building is damaged or destroyed and you have a reciprocal agreement with a nearby partner branch or competitor, you may be putting your business at risk.
There are many important differences between a reciprocal arrangement versus having access to a mobile banking facility. Financial institutions must have an understanding of the risks associated with reciprocal agreements and potential benefits to each choice. Recovery Solutions is committed to educating your staff on the importance of disaster recovery planning; consequently our experts have compiled a helpful, downloadable document designed to educate your staff and give you the tools necessary to make an informed decision.
Our team of experts has a combined 130 years of experience in the banking industry, providing working knowledge of every aspect of financial disaster planning and recovery. We are an industry leader in disaster recovery planning and business resumption for financial institutions:
Mobile Banking Facilities
Satellite Communications (Internet, Service Bureau, VoIP)
Comprehensive Testing to meet FFIEC Compliance
Complete Technology Package for Full Bank Recovery
Reciprocal agreements are common for financial institutions attempting to comply with FFIEC disaster recovery requirements without incurring major costs. A reciprocal agreement, according to FFIEC guidelines, is "an agreement whereby two organizations with similar computer systems agree to provide computer processing time for the other in the event one of the systems is rendered inoperable." While a reciprocal agreement with a partner branch or competing institution may look like a way to save costs, there are often consequences that can be exponentially more costly in the long run.
As a trusted disaster recovery service provider specializing in the banking industry, Recovery Solutions advises against reciprocal agreements for many reasons including risks to your reputation, potential loss of business, and possible noncompliance to FFIEC mandates. Here are a few key considerations:
Should disaster strike and you are forced to resume business in a reciprocal facility, what would it look like through the eyes of your customers? They may be walking into a competitor's location for up to an entire year while you rebuild. Not only will customers get used to visiting a competing location, but they will see their promotions, loan rates, pricing, and fees. How will you be able to attract new customers in this environment?
Will your staff be able to perform effectively? Will the reciprocal location have adequate space for your tellers, loan officers, and drive-thru customers? If space is limited it could affect your customer experience as well as the efficiency and information security of your entire operation. How will that affect employee morale and retention?
If a natural disaster damages a significant geographical area, will the reciprocal location be damaged as well? What if your "backup plan" is gone altogether? With reciprocal agreements there is a risk of being without a place to serve your customers.
There are numerous important questions to ask when considering a reciprocal agreement. Download a PDF on our website, or contact us for a complete consultation.
Reciprocal Agreements vs. Recovery Solutions Mobile Banking Facilities
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Don't take our word for it. Chris Gavin, president & CEO of Midwest Bank of Western Illinois, whose bank was damaged by fire, says a mobile bank from Recovery Solutions helped them respond and recover from disaster without sacrificing their business or their reputation.