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Using A Little Help From Your Friends

This issue and the last one deal with important compliance topics that relate to the bank's safety and soundness and ability to stay open. OFAC rules, discussed in the last issue, go straight to the bottom line. Whether your computers will work - and your elevators will run - in the Year 2000 will determine whether you are in business. Year 2000 problems may even determine whether your doors will actually open or stay locked.

Whether you adequately protect the privacy of your customers can determine whether they remain your customers. Techniques for determining the need for and maintaining flood insurance can make the difference in the bank's solvency - or whether the bank literally dissolves in the next major flood. These are major compliance issues that can determine whether your bank stays in business. But they do not involve the way in which your bank competes with others in your market.

Yes. These issues do affect products and services, but they do so in a non-competitive way. In fact, a high industry compliance level with these issues can only help banks as an industry. Catching the bad guys - especially terrorists - is good. Staying in business without mishaps or disasters through the first week of January, 2000 will be an accomplishment. Making sure your customers are adequately insured when the flood comes through can lead to grateful customers and wonderful press. Good compliance with these regulations can help the image of banks and bankers.

Computer driven products are everywhere, including places you haven't thought o? The PC (or Mac) on your desk is an obvious one. So is your mainframe.

Prudent people won't get into elevators on January 1, 2000. They may even choose not to start their cars. Worse yet, their cars may choose not to start. You may be able to walk to work, but will the vault open? Or, will the security system allow you to open the bank's door?

Year 2000 problems are lurking everywhere. Figuring out how to prevent disasters is a bit like walking a minefield. You can never be sure when you have found them all. Compliance with these and similar requirements is a challenge. This is not going to be easy.

The hardest thing about Year 2000 compliance is that it involves thinking up the many ways that the date change can have an impact. Doing this in a vacuum will not be productive. In this kind of project, a group - even a committee - is better than one person alone. We joke about the myriad of ways to waste time with committees. But committees also have their uses. Presumably, that's why they were invented.

The Year 2000 seems like a golden opportunity for good committee use. In fact, this is the time to network with others outside of your bank. You can do this safely and productively because these issues are not competitive. Teaming up will enrich your thinking, broaden your base of ideas, and perhaps even increase your resources.

As you may have noticed, we've had a lot of help from our friends in writing these issues. We see two advantages to this. First, it gives you different ideas and different points of view from people who are leaders in their field. Second, it gave us a day at the beach. Both are benefits.

Benefits such as this are why you should network to work on problems that don't involve competitive products or information such as the Year 2000. You can all benefit - and you might even get a day at the beach - before the systems crash! Use a little help from your friends.

And don't stop with the Year 2000 project. Sharing compliance problems can help you discover - or think up - better ways to comply. When you put your idea together with a friend's idea, you may get something altogether new. The old adage about the whole being greater than the sum of the parts is particularly true when trying to get the most out of scarce resources and tired brains. So have lunch with some friends and talk compliance!

Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 10, 8/97

First published on 08/01/1997

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