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4 min read

The events of the last several years have brought emergency planning to the forefront for businesses of all sizes. Whether it’s a natural disaster, a pandemic or a cyberattack, unexpected events can wreak havoc on your operations. That’s why you need to develop contingency plans now—before unpredictable, yet inevitable, disruptions occur.

When done well, treasury risk management lets you continue to meet your financial obligations regardless of the situation. It requires leaders to take a hard look at current operations and ask the complex question: Are we prepared for the unexpected? Solidifying your crisis response strategy ensures everyone in your organization can face market disruption with clarity, confidence and relative calm.

The questions below will help you assess your treasury readiness so you can develop the contingencies your company and your people can rely on during a crisis event.

Management and communications

  • Do you have a designated emergency management team? You need people who are accountable for the immediate response in the event of an emergency. Each department or function, including the treasury team, should have a designated person tasked with executing readiness tactics.
  • Do you have a predetermined chain of command for emergencies? Know who will take on key responsibilities and leadership roles if those typically in charge are unable to do so.
  • Have you documented the chain of command and distributed the information throughout the organization? Internal awareness is a crucial component of an effective emergency response. Everyone should know whom to contact—and how to contact them—for critical needs during a disturbance. Consider creating a wallet-sized contact card.
  • Have you developed internal and external communications plans for each type of crisis? This includes a list of key vendors, outside partners and even public agencies that may need to be informed.
  • Have you developed internal policies and procedures for each type of crisis? All team member should know their role and expectations for these scenarios. Make sure the list is easily accessible to members of emergency teams.

Treasury operations

  • Do you have alternate power sources for your main server? Establishing automated banking processes is a best practice for day-to-day cash management, but you should have a backup plan if your internet provider goes down.
  • Do you have a plan for securing data and facilities, as well as processing payments? This requires close contact and communication with vendors, financial institutions and external partners.
  • Do you have locations where you can rapidly shift accounting operations during a crisis? Having a contingent worksite will allow your business to continue running smoothly.
  • Do your banks have dispersed payment centers so that you can avoid accounting disruptions? Speak with your financial provider about preparedness and share your internal plan. Discuss how your banking partner will continue to support you in the event of an emergency.
  • Have you allocated emergency funds across different accounts? If a partner is also affected, this can help you maintain access to accounts. Keep accurate and up-to-date records of all of these accounts. 
  • Have you reviewed your account information to ensure accuracy and added authorized signers, security administrators, user IDs and entitlements with each of your banks? It’s important to keep your accounts secure on a day-to-day basis. Access to your accounts is limited to authorized people in your organization. Keep a hard copy printout of who has access to your accounts, what their privileges are and log-in instructions that can be shared securely if necessary.
  • Do you have a list of bank contacts handy? Ensure all key members of the emergency response team know who to reach out to at the bank for assistance in each scenario.

Tests and reviews

  • Do you conduct tests by logging in to your backup system and generating at least one live transaction per month? Running regular tests can help you avoid unexpected disruptions during a real emergency. You should also schedule full end-to-end tests that validate your ability to recover quickly.
  • Have you audited your tests? An additional layer of confirmation can help safeguard your business and give you peace of mind.
  • Have you scheduled periodic connectivity reviews between your backup systems and your internal departments, customers, suppliers and other key business contacts? These tests should ensure all of these entities are compliant and operational.

Remember that communication, preparation and testing will help your business conquer any crisis that occurs with minimal disruption to your treasury operations. Readiness also means putting plans in place that reduce stress for employees who could be impacted by the crisis in both their work and personal lives. By focusing on preparedness and bringing everyone along in the process, you’re sending an important message: We don’t only care about the business—we also care deeply about you.

JPMorgan Chase experts help clients prepare their treasury organizations and their businesses for the unexpected. Contact a Commercial Banker today if you need help building resiliency into your treasury operations.

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