MONEY AND THE MILLENNIUM: Should We Fear the Y2K Bug?

• Position: Survey indicates that 47% plan to make substantial withdrawals from their banking accounts before the year 2000 arrives, despite preparations by the banking industry - Brief Article

According to a CNN/Time poll, 47% of Americans plan on withdrawing a substantial amount from their bank accounts just before Jan. 1, 2000. Such concern over the Y2K transition and the banking industry has become a growing phenomenon. From emptied accounts to Internet interference, bank customers face an array of potential hassles in 2000. However, professionals within the banking industry have been taking steps to ensure that the approaching millennium brings as little financial ill will as possible.

Diane Peterson, senior vice president, First Southern Bank, Boca Raton, Fla., highlights some prevalent concerns and offers some timely tips for a more manageable millennium:

Common customer fears

The "money under the mattress" hysteria. The threat of banking customers "cashing out" in December has become more of a myth than a literal likelihood. "The world's not coming to a screeching halt next January. I've heard of very few customers willing to withdraw all of their funds at once."

Official regulatory bodies have required banking institutions to begin Y2K preparation early--as far back as 1997. "We made sure our vendors provided updated software and servicing products, and distributed questionnaires to customers to gauge their concerns and prepare accordingly."

Of the many complications associated with the transition, one banking service is being questioned more than any other. "ATM machines have people worried, but account balances are not going to be affected come midnight on New Year's Eve. What's there is there, and those funds will be accessible."

One hundred years of debt? Another main concern deals with past-due charges. The possibility that software could read 2000 as 1900 has concerned a number of banking customers worried about their various past-due--and misread--charges. "A debt owed from a week ago will still be no reason to panic. A debt from 1900 might look a bit troublesome to a credit reporting agency, but bankers are aware of the situation. Let's use some common sense here. Nobody's going to be held accountable for a 100-year-old debt. Even if a computer program does roll back to 1900, appropriate alterations will be made and, of course, applicable interest charges will not be assessed."

Vanishing voices. Telecommunications systems rely heavily upon recorded messages, whether they are voice-mail networks or simple answering machines. With the banking industry's growing utilization of telecommunications systems, many...