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The Y2K Scare: Looking at the Numbers
During this nationwide guessing game we're all playing leading up to the Year 2000, many of us in the banking industry are looking for input from numbers being gathered from a variety of sources.
One question we're seeking answers to is: will consumers run to the automated teller machines on Friday, December 31 or shortly before to withdraw large amounts of cash?
The answers we're finding so far are hardly the stuff of panic, but they do shed light on the subject.
For example, a recent survey (released in May) conducted by Gallup and commissioned by Star Systems, Inc., a not-for-profit network of ATMs in the Southeast, revealed that eight out of 10 consumer respondents expect no trouble in conducting transactions at ATMs or at grocery and gas stations on January 1, 2000. And while 64 percent said they plan to "withdraw and set aside extra cash" prior to the new year, more than half of those said their withdrawal amounts won't exceed the normal amounts planned for a weekday, weekend or holiday.
The numbers are backed up by an earlier Gallup poll (released in March) conducted as part of an ongoing series of surveys on Y2K concerns conducted by CNN/USA Today/Gallup Poll in partnership with the National Science Foundation.
Thirty percent of respondents in that survey said they will withdraw and set aside a large amount of extra cash. However, Gallup pointed out that a parallel survey conducted with open-ended questions instead of prompted questions (what do you plan to do when the millennium bug hits?) found that only 15 percent mentioned withdrawing extra cash. Even so, while they may not be withdrawing cash, they will be seeking reassurance and confirmation that their funds will be safe - 66 percent of respondents said they will obtain special confirmation of bank account balances and other financial records.
The March survey also revealed that the numbers of Americans that have seen or heard "a great deal" about possible problems is rising - from 39 percent in December 1998, the last time the survey was conducted, to 56 percent in March 1999. At the same time, the number of people who expect major problems has fallen - from 34 percent in December 1998 to 21 percent in March 1999.
Those figures are interesting in light of another question asked on the more recent Star survey, which was: what parties will most influence banking-related plans for preparing for Y2K. Banks apparently have the potential to play an important role in influencing public action. Seventy percent of respondents said information from their own banks would be most important to their actions; 40 percent said government reports; and 28 percent said media and news reports.
Another interesting result from the Star survey answers the question of who we should be getting information out to, and the answer is: everybody. The survey found that unlike in many areas of banking, there was very little difference in age or income bracket in who was and was not concerned with the millennium bug.
Help from Banking's Vendor Industries
- As the millennium and its potential problems looms, vendors to the banking industry are offering unique ways to help.
- Regulatory agencies have been telling banks to watch cash activity closely and note deviations from normal customer practices. An overall business plan submitted June 30 includes an outline of how a bank will deal with these potential cash accessibility problems.
- Spear Marketing hopes to help with that plan. It is offering a cash monitoring outsourcing service that for $10 per branch per month, provides detailed reports of cash activities. The service "monitors" cash activity by compiling information provided by financial institution clients and spitting out weekly or monthly reports to management via a number of media including the Internet. The software that compiles the reports can also accept historical data as far back as a bank wants to go. It is designed to give management the tools it needs to estimate future cash needs. Spear's Web site (www.spearmktg.com) has lots of information on what regulatory agencies, the industry, and even customers say about the cash problem.
Meanwhile, SBS is reaching out to community banks that are part of the large percentage that are well on their way in Year 2000 efforts, but need to publish that fact to calm the public's concerns.
SBS' program includes two initiatives. First, the company is offering its current customer base of more than 900 community financial institutions a series of advertisements to promote assurance of bank deposit safety. The ads include statement stuffers and camera-ready newspaper ads.
Second, SBS is offering new customers post-installation testing of its own products. As the company points out, many businesses are reluctant to purchase new computer products this year because of the fear that they will not be compliant and the cost of finding out whether they are. While SBS says its products are all Year 2000 compliant, federal regulators require testing of all equipment and software, so SBS has offered to conduct the testing itself.
Copyright © 1999 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 9, No. 5, 6/99
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