Natural disasters have always been a major threat to the banking and finance sector, causing many serious risks such as:
- People Risks
Internal Staff
- Develop response, rescue and relief scenarios: Ensure staff safety and maintain business continuity in emergencies.
- Rehearse the scenarios regularly to ensure effectiveness: Help staff master response procedures, minimising risk and damage when incidents occur.
- Set up rapid response and support hotlines: Provide timely information and support to staff in emergencies.
Customers
- Ensure customer safety and support: Protect and support customers in emergencies to maintain their trust and satisfaction.
- Asset Risks
The Bank’s Own Assets
- Protect and maintain internal assets: Banks need measures to protect their internal assets from risks such as damage and loss to ensure continuous and safe business operations.
Customers’ Assets
- Loss of collateral: Collateral securing customers’ loans may be damaged or destroyed by natural disasters or other incidents. The following measures are therefore needed:
- Inspect and revalue existing collateral: Assess the current condition of collateral to determine the extent of loss and damage.
- Review the collateral portfolio of customers in disaster-affected areas: Ensure that the collateral still holds value and can still be used to secure the loans.
- Take appropriate risk treatment measures: For damaged or devalued collateral, take measures such as early debt recovery, asking customers to make partial repayments, or replacing it with other collateral.
- Customer Repayment Capacity Risks
Customers suffering losses after a storm
- Reduced ability to pay: Customers who suffer losses after a storm may lose their jobs or need to use the money intended for loan repayments for survival purposes such as repairing their homes or buying food, medicine and drinking water. This reduces their ability to pay and creates credit risk for the bank.
VietESG specialises in consulting services and roadmaps for Business Continuity Plans (BCP) to help banking and financial institutions manage and mitigate risks from natural disasters. We are committed to helping you develop response scenarios, conduct regular drills and establish measures to protect assets and customers.
Contact us for detailed advice:
- Phone: 0969060290
- Email: quynhhoa@vietesg.com
We are always ready to support you in any emergency to ensure continuous and safe business operations.
By Mr. Phạm Quốc Hưng – BCP and ESG Expert
