Financial Update (October-December 1999)
Tying Up Loose Ends: Final Y2K Preparations
he clock seems to tick faster now as the Year 2000 is only weeks away. Years of meticulous preparation for the event are now giving way to final run-throughs of plans and reverifying of systems compliance. With the end of the year at hand, any loose ends and last-minute preparations for Y2K need to be resolved efficiently and completely.
Federal Reserve staff are busy ensuring that event plans are in place and well-tested. During the upcoming weeks, communications between the Federal Reserve and customers will increase as the Fed helps customers manage this transition period. The Fed also plans to have staff available during the rollover weekend to assist customers. There are, however, some things financial institutions should keep in mind and check themselves while making final Y2K date change preparations.
Final System Checks
Any systems that still require testing should undergo thorough testing in the final weeks of 1999. In addition, any operating systems that have undergone modifications since they were originally certified should be recertified before the end of the year. Any special change procedures that are necessary should be implemented in the next few weeks. The Fed has implemented some moratoriums on internal changes on Fed systems and has given banks deadlines for ordering new connections to Fed systems. (More information on the deadlines is available on the Web at http://www.frbsf.org/fiservices/letters/ea/announce/index.html.)
All internal system health checks should include testing applications that interface with the Fed. If any systems need final verification of Y2K readiness, banks should arrange to have the systems tested.
Backups of systems should also be tested. Financial institutions should check their procedures for backing up Fedline systems as well as any other Fed system interfaces. Financial institutions should also remember to retain paper backups of critical applications and records.
If off-site relocation is included as a part of a backup plan, the plan should be reviewed to ensure that work and information can travel to the alternate sites without significant delays.
Testing Contingency Plans
Contingency plans should also be thoroughly reviewed. Planning tests and walk-throughs of all systems that might be used during contingency operations will ensure that any "bugs" are identified before the plans are needed and will clarify any procedures that are cumbersome and might need to be refined.
Communication With Customers
As the end of the year approaches and customers' inquiries about Y2K preparations increase, financial institutions should emphasize testing and contingency plans to customers to help assuage their concerns. Continuing any communications plans already in place is also essential.
On Dec. 31, the Friday before the Y2K rollover, financial institutions should gather electronic and paper backups of essential business information such as records of customer accounts. Financial institutions should also ensure that government automated clearinghouse payments have been processed and keep records of these transactions. (Payments from the Social Security Administration may arrive as early as Dec. 28.)
On Saturday, Jan. 1, 2000, Fed staff should be available to test date change readiness (testing, of course, should be scheduled in advance). Fed staff will also be available during the rollover to assist with resolving problems related to Fed system interfaces.
Additional suggestions for preparing for the Year 2000 are available in the September/October Century Date Change Bulletin at www.frbsf.org/fiservices/cdc/bulletin8/index.html.