Academic journal article ABA Banking Journal

War Prompts Banks to Review Security

Academic journal article ABA Banking Journal

War Prompts Banks to Review Security

Article excerpt

Bankers who gathered in New Orleans for the ABA National Security and Risk Management Conference received expertise on topics ranging from money laundering legislation to electronic data interchange. But the buzz surrounding the outbreak of war in the Gulf made security issues a more urgent priority for some bankers, as the country now stands more vulnerable to international terrorist threats.

Security officers attending the conference discussed a new "heightened awareness" because of the Iraqi conflict, and especially in light of recent bombings to banks in Greece. "We're clinging to the hope that it's not possible," said one deputy director of corporate computer security for an eastern U.S. bank. Referring to his bank's bomb plan, he said, "We're blowing the dust off what we developed and are strengthening controls now. "

Phil Sprick, vice-president and director of security for First Commerce Corp., New Orleans, said, "We haven't had any real threats to our banks other than an anonymous phone call for a bomb. But right now we're making people more aware because a real potential exists for getting a terrorist threat and having it carried out, " he added. He said First Commerce's top officers and executives are being discouraged against international travel, and domestic travel is advised only if absolutely necessary.

Sprick said financial institutions should be concerned about becoming victims of indirect aggression stemming from after effects of the Persian Gulf conflict.

The biggest threat is a civil disturbance resulting from a protracted war," says Sprick. "Protesting turns into rioting, which just happens to spill over onto a bank's vicinity and make it difficult to do business. This war may end in 30 to 60 days, but the fallout from it will not end for at least a couple of years. "

A seminar titled "How to Design a Bomb Threat Plan that Won't Blow Up" approached a sensitive issue with guidelines that security officers can implement as a response to bomb threats to their bank facilities. The presentation was given by Peter Baldassaro, vice-president of corporate security for the Hibernia National Bank of New Orleans.

Although national statistics show that only 5% of all bomb threats received from banks are specifically terrorist in nature, said Baldassaro, the time for developing a long-term strategy to combat all kinds of bomb threats should be proactive, not reactive. Statistics he quoted also show that one out of six bomb threats results in a detonation. Three basic areas. He cited moral issues, business implications, and legal concerns as three main areas that a plan should address. "Employee and customer safety should be your main concern. Next, you have to minimize the impact on your ability to operate. You also have to protect your corporation against civil liability because you could be subject to claims of negligence. Insurance coverage could be compromised if due diligence is not exercised," Baldassaro told attendees.

Baldassaro developed his bank's plan in response to an unusually high incidence of threats in regions where Hibernia's branches are located.

"A number of years ago, there was a crude pipe bomb that detonated, causing damage at a bank that resulted in significant business disruption," he said. The bomb was thrown at the front door from the outside and exploded through the glass window, but there were no injuries because it went off at 2:00 a.m. The local bomb response team came to the aid of the particular bank, and business resumed without interruption the next day.

In every bomb plan, Baldassaro pointed out, it is first imperative to assign the various roles that each department will play in the procedure, and then designate one person in the bank to lead the operation. This person makes all crucial decisions in the short time available to carry out the plan, according to Baldassaro.

"You can't deal with a bomb threat as a committee, because time goes by," he says. …

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