Pub. 12 2021 Issue 1

www.wvbankers.org 16 West Virginia Banker COVID-19: Impact on Controls, Customer Service, Delivery and Hiring By Andrew Shear, Arnett Carbis Toothman LLP COVID-19 and the Future of Banking It is apparent that 2021 and the future going forward is not going to be the same. But what does this really mean for banking? I would like to provide some considerations and thoughts (general and technical) on a few topics related to the future of banking and being prepared for crisis situations. Internal Controls Internal controls are critical to any organization, especial- ly banks. To jump right into an example, file maintenance changes. When a change is made to a customer’s account, an employee independent of the process is usually tasked with reviewing or verifying the change for accuracy to prevent in- accurate data from being inputted or fraudulent transactions from being committed. If an employee who would be tasked with reviewing these changes is out for an extended time, is there a backup properly cross-trained? What if that employee who is authorized to make the file maintenance changes is out as well, and someone not usually tasked with that has to step up? Is that backup properly cross-trained as well? If certain employees are out for an extended period and backups are not properly cross-trained, then the internal controls’ front and back end have potential weaknesses. If the borrower calls and says, “my loan payment was applied incorrectly because my interest rate was not updated correctly” or “my loan due date was pushed back, but my loan is still showing as past due,” is the control operating effectively? File maintenance changes are just one example. This applies to every control at your bank; are backups properly cross-trained to effectively handle controls and processes at the drop of a hat or for an extended time? Will these controls and processes still stand up to an audit or an exam without criticism? COVID-19 has made us think about every possible possibility. Are the proper controls in place, includ- ing the effective cross-training and the proper hierarchy to handle employee absences without jeopardizing the overall control while still preventing the possibility of errors, fraud, and compliance issues? Remote Banking Remote banking and e-banking are certain to expand in the future, and many banks already have a head start. While some of these types of products may have been previously discussed, COVID-19 has certainly accelerated our thinking. I think I am like most people and had never heard of Zoom until about April of last year. So what is e-banking to your bank? Some questions to consider: • What services are to be offered to a customer who does not want to go inside a bank building or even han- dle a deposit or withdrawal slip through a drive-thru? • Is remote deposit capture the future for all businesses and consumers? • Is your bank ready to offer these products from a finan- cial perspective, from an IT/security perspective, and an internal control and policy perspective? • What is the impact on the bank’s disaster recovery plan and management succession plans? Are these plans updated to account for the times we are living in now and how business interactions and banking will differ going forward? Now is a good time to dive deep during the review of these plans and ensure they are adequate for the future. What do your customers and borrowers really want? Not every online product or app feature has to be offered, but what are the main products your customers really want? E-signing for loans is another example. And once these products are established, who is to say your bank cannot open up your market and grow?