New York (AFP) – Large US banks have begun testing crisis measures in case of a broader coronavirus outbreak that prevents staff from going to work, banking sources told AFP.
JPMorgan Chase, Morgan Stanley, Goldman Sachs and Citigroup have asked hundreds of workers to work from home as part of emergency preparedness.
“We are asking some employees to work from home over the next two weeks just so we can test systems and remote access,” said one person familiar with the process, characterizing the step as “typical contingency stuff.”
JPMorgan has undertaken tests at a disaster recovery site in London and two in the United States, in Brooklyn and the state of New Jersey, a source told AFP.
Citigroup has undertaken a similar process in London and New Jersey, while Goldman Sachs has done tests at a site in London.
“We have recovery sites and we continually test them,” said a Goldman Sachs spokeswoman. “As you can imagine, we are enhancing our testing in view of the coronavirus.”
The banks want to be able to assure consumers that services won’t be affected if employees must work from home.
The companies have added computer programs to simulate remotely the systems used by financial traders, sources said.
There has also been extensive testing of disaster recovery sites to ensure the same quality of service as at the office.
While working remotely is relatively straightforward for administrative staff, there are more challenges for traders and sales force employees.
These include issues with the quality of home Internet service, as well as the sophistication of information security systems and whether networks are shared with other family members.
There is also a need to maintain sufficient oversight of traders and commercial workers to meet regulatory requirements.
Banks must keep records of phone and written communications of traders and they can be fined if they don’t follow the rules.
Firms have asked US and British regulators for flexibility on the rules, sources told AFP, confirming a report in the Financial Times.
US authorities have relaxed rules in early disaster-type scenarios, as in 2012, when Hurricane Sandy battered the New York region.
The US Securities and Exchange Commission and the Financial Industry Regulatory Authority, a private self-regulatory body, did not immediately respond to requests for comment.