Banks Should Lead the Way to Prevent Y2K Panic
By Frederick Talbott and Robert Blanning
NASHVILLE -- A remarkable event occurs each time a horse commits itself to leap a hedge, fence or hurdle on the steeplechase track here. At that moment, just a few feet shy of the jump, the horse cannot see it. The eye placement that gives the horse superior peripheral vision also creates a virtual blind spot directly in front.
What spirits the horse over the hurdle is a combination of preparation and absolute trust in and communication with the rider.
That's a fitting analogy for the challenge and opportunity facing the nation's banks as we enter the final year of the Y2K countdown. Banks must now put communication, both internal and external, on the front burner alongside the ongoing brew of computer replacement, software recoding, and systems testing.
What's at stake is trust, the very core of banking as we know it. And banks, the foundation of our financial system, would be wise to generate all the trust they can muster as we enter the period of period of increased Y2K attention, hype, and resulting uncertainty.
As banks merge and grow mighty, they tend to distance themselves from direct customer contact. And that contact in message and manner may be the most significant path to year 2000 banking stability.
Banks must develop and share ongoing best communication practices now to prevent mistrust and thwart the competition: doomsayers, religious fatalists, rumors, ignorance, and indifference. Both extremes pose hazards: the doomsayers may prompt fear and panic, the naysayers nonpreparation.
What the public needs is honest, timely information and clarification.
With an astronomical number of chips and lines of computer code in play, no one knows what will happen when January 1, 2000 arrives. History has taught us that we must summon our courage and make contingency plans for any eventuality.
The Bank Administration Institute, the American Bankers Association and others are developing communication processes to meet the Y2K challenge. Senior bank officials must immediately raise such efforts to campaign status to best address this challenge and prepare us for the rapidly approaching Y2K deadline.
Customers and employees need constant updates, progress reports, and direct personal assurances that if anything goes wrong the banks will work with them to fix it. They need the assurance of clear and direct procedures they can follow to keep accurate records and proof save all canceled checks and bank record printouts and clear guidelines telling them who to see and what will be done if problems arise.
Banks must manifest so much trust that the public will stick with them, no matter what happens.
In fulfilling its communication duty, the banking industry can help us manifest sufficient trust and understanding to keep Y2K in perspective. As Winston Churchill advised the free world during the darkest days of World War II, "I have no fear of the future. Let us go forward into its mysteries, let us tear aside the veils which hide it from our eyes, and let us move onward with confidence and courage."
The challenge is great and the opportunities are endless in what might be called the last great campaign of the 20th Century. By best informing the public and championing the process of trust, banks can lead the nation in persevering amid any Y2K turmoil or confusion. In doing so they may also inspire courage and faith, two of the most treasured qualities of the human spirit essential to our success in the 21st Century.
Mr. Talbott and Mr. Blanning are professors at Vanderbilt University's Owen Graduate School of Management. Their address is OGSM-Vanderbilt, 401 21st Avenue South, Nashville, TN 37203.