Bird Flu and Your Bank
By Ronald Schouten, M.D. and Michael V. Callahan, M.D.
Banks are no strangers to crises. From bank robberies to the possibility of terrorism, banks have had to deal with threats to the well-being of employees, customers, and the overall institution. That, of course, is why banking regulators place a considerable amount of emphasis on business continuity planning.
The latest threat to bank operations is the well-publicized specter of an avian influenza (AI) or bird flu pandemic, which was the subject of an MBA Special Bulletin dated April 27, as well as an Interagency Advisory on Influenza Pandemic Preparedness dated March 15.
As of this writing, H5N1 has not demonstrated the capacity to easily infect humans, nor has significant human-to-human transmission occurred (and not in the most dangerous mutated form).
To date, only viruses labeled with viral surface proteins known as hemagglutins (H) types H1, H2, and H3 have been shown to infect humans. However there is growing concern that the H5N1 virus could acquire the ability to infect humans through two methods: either through gradual selection from constant exposure to humans, or through the exchange of genetic material with one of the many circulating human influenza viruses.
The World Health Organization and individual governments around the world have been engaged in aggressive monitoring and eradication programs to control AI. To date, these efforts have been effective. Should these efforts fail, however, the human and economic impact will likely be felt worldwide. The epicenter of a pandemic will likely be in Southeast Asia, but global transmission will be accelerated by the speed and extent of commercial air travel. In other words, if human-to-human transmission develops, we must assume that it will reach the United States.
The Expected Human Impact Estimates indicate that approximately 20 percent of adults of working age and 40 percent of school-age children are likely to be infected. The mortality rate for all documented cases of recent human infections dating back to 2003 is 57 percent; for 2006 it is 64 percent.
An influenza pandemic is going to have a considerable impact on the psychological well-being of bank employees. As with other disasters, more people are likely to suffer psychological symptoms than to become physically ill from the virus. While 20 percent of working adults may get infected, a significant number of other employees may believe they are infected with AI when they experience normal aches and pains, headaches, and symptoms of common colds or ordinary flu. Employees with children, elderly parents, or other family obligations will naturally be distracted from their work by these concerns.
It is normal for people to respond to traumatic events with a range of anxiety-related symptoms, with most people requiring no treatment. A pandemic, especially one that causes widespread illness and death, may have an impact similar to shootings, terror attacks, and bank robberies. For most people, these symptoms resolve fairly quickly and have only a minimal impact on their day-to-day functioning.
The likelihood of any given individual developing more severe and chronic psychological symptoms depends upon a number of individual and organizational variables. Among people infected with SARS, 10 percent to 35 percent had symptoms of anxiety, depression, or both in the month following recovery. Increased rates of anxiety and depression are also found among individuals subjected to quarantine. A study of individuals living in areas affected by SARS revealed that they experienced shunning, insults, marginalization, and rejection at work, school, and in interpersonal relationships. A variety of measures can help mitigate the psychological impact of disasters. These include taking personal protective measures and support from public agencies and employers.
Thus, the psychological impact of an AI pandemic is likely to be widespread, with its extent and duration dependent upon the severity of the pandemic and the availability of measures that encourage personal and organizational resilience.
The Expected Business Impact
Past experience with infectious agents in the workplace and various models for the pandemic provide an indication of what to expect should it occur. Banks should anticipate employee absenteeism of up to 50 percent, either due to illness or the need of employees to stay home to care for ill family members, to take care of children whose schools are closed, or simply out of fear of exposure in the workplace. A study of health-care workers, for example, revealed that only 48 percent would be willing to report to work in the event of a pandemic, proven in the case of SARS.
These same factors will lead to similar high rates of absenteeism for businesses that supply and service banks, e.g. courier and delivery services, suppliers of forms and office supplies, computer repair and service, armored car deliveries, etc. Even in the age of electronic banking, banks may find it difficult to serve their customers without these services and supplies, as these materials are still part of everyday banking. Even online and other data transfer functions may be affected, as electric utility and telecommunications companies are going to suffer similar absenteeism problems.
Public authorities may shut down individual banks implicated in workplace-acquired infections. Employees working in overseas offices or otherwise traveling may be unable to return to the United States, as airline travel is likely to be curtailed. Affected banks that appear to have ill employees will likely experience a drop-off of business. The International Monetary Fund predicts that the economic impact of a global AI pandemic will be significant, widespread, but relatively shortlived.
In short, a pandemic is going to have worldwide economic consequences, disrupt bank business through high absenteeism among employees of the bank and the bank’s vendors and suppliers, and may have long-term consequences for those banks stigmatized for having ill employees.
Mitigating the Impact of a Pandemic
There are a number of things that banks can do to increase the resilience of individual employees and the bank as a whole. We can divide these into three time periods: pre-pandemic, during the pandemic, and post-pandemic.
Pre-Pandemic: Planning is the most important mitigation tool. The federal government has developed an AI response plan, but that plan makes clear that the federal government has limited ability to meet local needs in the event of a pandemic. Massachusetts has developed a comprehensive plan that includes vaccination (when a vaccine becomes available), distribution of antiviral medication, and emergency public health measures.
Even the best government-based plan cannot do enough to mitigate the impact of a pandemic on individual businesses and their employees. It is essential that every organization have its own AI response plan in order to protect its operations and employees in the event of a pandemic, and coordinate that plan with local authorities. Business continuity plans aimed at protecting data, stockpiling essential supplies that may be difficult to obtain, and backup services should be developed. Work-from-home programs, and adequate technical resources for virtual private network access and traffic, should be developed in case the pandemic strikes. Workplaces should prepare hygiene kits containing gloves, masks, and antiviral hand gels that can be deployed if a pandemic strikes. The ability of occupational health and employee assistance services to meet the needs of employees should be determined during the planning stages and tested during rehearsals.
Banks should develop health promotion programs aimed at decreasing the risk of employees or customers being infected with AI or other viral and bacterial illnesses. Programs should include basic education on hand washing, covering the mouth during coughs or sneezes, staying home from work when ill, and getting annual influenza vaccinations. The standard vaccinations will not protect against AI, but they help identify likely cases of AI infection during a pandemic and decrease the risk of developing an H5N1 that can infect humans. While such efforts can help reduce the chances of infection with AI, they will have a more immediate benefit by decreasing absenteeism due to ordinary colds and flu.
Employees should be encouraged to prepare home disaster plans with adequate stockpiles of food, water, batteries, and a battery-powered radio or television. Banks should consider preparing such kits for the banks themselves, in the event that certain employees need to remain on the premises. Plans should be made with building engineers to adjust HVAC systems to decrease the risk of harboring and spreading infections. Similarly, discussion should be held with those responsible for office cleaning to make sure that hard surfaces (including computer keyboards) are cleaned with solutions that kill viruses.
The Department of Health and Human Services has developed a useful pandemic influenza preparation checklist that has been adopted by the FDIC.
During the Event: Should a pandemic occur, banks should activate their disaster plans, including business continuity measures, improved office cleansing, adjustments in the HVAC system, and coordination with local authorities. Only essential employees should be required to come to work, with others working from home. Employees should be instructed in increased hand-washing measures and use of antiviral hand gels, especially after using public transportation or touching objects that can transmit infection, such as money. Employees should be instructed in the proper use of face masks when there is risk of exposure.
Leadership is critical during all disasters, and that will be no less true for pandemics. Direct, honest communications from bank leadership to employees and customers will help maintain confidence in the bank and the leadership. Leaders and organizations that demonstrate appreciation of the pressures and conflicts experienced by employees during such a disaster are likely to be rewarded with ongoing employee loyalty when the crisis has passed.
Post-Event: While a pandemic may be initially short-lived, it is important to keep in mind that the outbreaks tend to occur in waves. This means that disaster response plans must be continued even after the first wave has passed. One of the biggest challenges to banks will be in getting employees and customers back into the bank. This can be aided by preparing accurate information about health measures being taken by the bank.
In addition, banks will benefit from efforts to help employees recover from the psychological effects of the pandemic. In times of disaster, individuals tend to rely upon those individuals they know best: family, friends, and coworkers. Research has demonstrated that workplaces have a significant role to play in helping employees recover from traumatic events, both man-made and natural disasters.
Finally, post-event leadership is critical if the bank, its employees, and the community are to quickly return to normal. Banks and bankers are essential to the financial well-being of every community. Community banks are a symbol of stability and prosperity, and their ability to resume operations will help each community to regain a sense of normality.
Dr. Ronald Schouten, a lawyer, is associate professor of psychiatry, Harvard Medical School; director, Law & Psychiatry Service, Massachusetts General Hospital; and president, KeyPeople Resources Inc.
Dr. Michael V. Callahan, who holds a Master of Science in public health and a diploma in tropical medicine and hygiene, is instructor in medicine, Division of Infectious Disease, Massachusetts General Hospital; and a program manager for the Defense Advanced Research Program Agency, U.S. Department of Defense.