COLUMBIA, S.C. – Communications, or the lack thereof, loomed large in the wake of Hurricane Katrina, as core processors scrambled to help their client credit unions restore operations and get back to business after the storm. That could be a while, though, perhaps especially for credit unions running systems in-house in the areas most directly in the path of the hurricane – southeast Louisiana and coastal Mississippi and Alabama. Credit unions in service bureau relationships seemed to be the first to get back online, if they even ever stopped offering online and IVR services, while those with in-house systems were often facing bigger challenges, such as even being able to get back to their buildings. Carl Faulkner, a veteran consultant with Cornerstone Advisors (www.crnrstone.com) in Scottsdale, Ariz., says that might be but one lesson that financial institutions will learn from the devastating storm, as well as biting the bullet and committing to offsite backup operations. "Banks and credit unions both often look at the cost of continuously running a hot site as prohibitively expensive, and they're willing to take the risk of not having one, but if it takes two or three days or more to get to another site and get set up and all that, it's going to look pretty cheap by comparison," Faulkner says. "This whole situation is going to be a test of the adequacy of offsite systems from the Florida Panhandle through Louisiana," Faulkner says. "I imagine the phone lines at those backup recovery sites are going to be buzzing for quite a while." While struggling through the Gulf Coast's devastated telecommunications systems to re-establish phone and computer connections with clients, core processors also were checking their closets for modems and other computer equipment they might need to pack up and take to affected credit unions to provide help in person. That includes IntegraSys, which says 24 of its core processing customers were significantly affected, with some of their offices completely underwater at times. Eighteen of those are service bureau clients, and the Fiserv unit is helping them reconnect through dial-up lines where broadband Internet connections are not available, says David Turner, CIO at Texas-based IntegraSys. "They're not in their building but they're up and running," Turner says of one client in Louisiana. Meanwhile, a group of five IntegraSys client credit unions have converged at one CU in Jackson, Miss., that still had power, thanks to its proximity to a main power station, says Buddy Baxter, IntegraSys' infrastructure services manager. "It's like a war zone around them, but they're able to do business as usual, as much as they can," he says. Upriver, as what became Tropical Storm Katrina crossed over his Memphis office Tuesday morning, Daryl Tanner says despite the howling wind and blowing rain, he's grateful for some of the little things in life, like virtual private networks (VPN). Tanner is president/CEO of Share One Inc., a provider of core processing, Internet banking and other electronic services to 36 client credit unions. "At times like this, credit unions turn to their core processors basically to give them access to their members' information as quickly as possible," Tanner says. "VPN has been a godsend for credit unions for that. You can push a lot of data across them and as long as you have broadband access to the Internet and a place to be, like a convention center or a hotel, you can generally get what you need." Of course, getting what they need also depends on the provider's ability to weather the storm itself. For instance, the power was out Tuesday at EPL Inc. in Birmingham, Ala., but the core processor for 85 credit unions was running on backup generators and helping about 20 clients recover, including one whose facility in New Orleans was physically unreachable. The 4,700 members of $13 million Tulane-Loyola FCU (www.tulane-loyola.fcu) do have access to Internet banking and interactive voice response, and EPL was working with its staff to create a VPN that can be used to create what would be in effect remote branches for the hard-hit CU, an EPL service bureau client. "The hurricanes have given us a lot of practice, this is the third one we've had to prepare for in the past 12 months," says Mike Shaw, who oversees EPL's data center. "We're still open. Trust me." Shaw says one of the key lessons he sees credit unions and core processors like his learning from this is that "disaster recovery involves more than relying on a piece of paper on bookshelves." "The whole landscape of technology is changing to make recovering easier, but you need to push all this down to the people who actually have their hands on the code and the systems," he says. The difficulties for in-house clients also were clear to Tom Falk, the vice president for client services at AFTECH who was helping a $109 million client CU in the storm-battered parishes southeast of New Orleans. As the storm approached, AFTECH worked with the credit union to make sure data was backed up and moved off site before its staff joined the mandatory evacuation. The CU now may decide to send staff to AFTECH's headquarters in Malvern and become an instant service bureau client. "We also can help them here with third-party relationships, like making phone calls to telecommunications providers and other suppliers, and in general help re-create their back office here," Falk says. But, try as they might, core processors – providers of the technology and processes that form the heart of a modern credit union's infrastructure, can't do everything. "It's tough," Falk says. "The thing about a disaster of this type is that you're dealing with people. They've got families. They've got homes. They've got those issues to deal with, too." -

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