After 9/11, the world as we knew it changed. The government updated laws and screening processes, but the average person sees the changes most when they catch a flight. Additional security checkpoints funnel carefully screened passengers to their terminals. Family members, who could once stand at the gate to give long-awaited hugs or wave goodbye as the plane taxied out onto the tarmac, are now relegated to the drop-off zones, ticketing areas and luggage pick-up.
Just like airline travel changed after 9/11, financial institutions will need to change after the COVID-19 pandemic. While there have long been threats of other global diseases, this is the first time in centuries a virus has so heavily impacted everyday life.
Financial institutions across the country are closing branches, limiting hours and waving fees in an effort to protect employees and still provide cash and services. Access to money, after all, is a necessity.
But while we all work together to make it through this global event, it is becoming abundantly clear that a post COVID-19 world will not and cannot be the same. Banks and credit unions need to find a balance that allows them to continue to serve account holders, while keeping their staff safe as it is becoming clearer that social distancing could be a matter of life and death.
Here are 4 predictions about the future of banks and credit unions in a post COVID-19 world.
Pandemic Response Plan. The FDIC released official “Influenza Pandemic Preparedness Interagency Advisory” in 2006 as a response to the outbreak of avian flu in Asia. The FFIEC agencies jointly issued additional guidance around pandemic planning in 2008. While the majority of banks and credit unions are currently using this guidance, many will need to take current circumstances as a learning experience for developing future response strategies.
Post COVID-19, these changes are likely to include a heavier focus on self-service options and remote banking, which have proven to be the safest and most preferred channels throughout the current pandemic.
Branch Transformation on Steroids. The most recent trends in updating branches have a heavy focus on reducing in-branch staff, increasing self-service technology and providing access to remote teller services. These options limit person-to-person contact while allowing account holders continued access to branch services.
But even some institutions with a heavy self-service presence are having difficulty right now providing access to cash and services due to placement of the machines. Rear access through-the-wall ATMs cannot be loaded with cash if the branch is closed and the service company cannot gain access to the ATMs and other self-service machines. Internal self-service machines cannot be used by account holders if they are inside the securely closed and locked doors.
Post COVID-19, branch transformation implementation will speed up. However, planners will need to take a closer look at the long-term availability of their self-service channels such as island ATMs and self-service vestibules separated from the branch.
A Better Understanding of Payment Choice. One of the big debates during this pandemic has been the safety and availability of different payment options. Some news outlets made attempts to push contactless transactions while classifying cash as a “dirty” option.
But experts were quick to point out the fallacy in this argument, noting that viruses are known to survive longer on hard surfaces such as plastic and metal versus the porous materials such as wood pulp and cloth used to create the world’s currency. Proper testing of mobile phones and plastic cards have also shown a worrisome amount of filth that hardly gives credence to the claim they are somehow a “cleaner” option.
In a post COVID-19 world, many consumers and financial institutions will be reevaluating how they are presenting and supporting consumer payment choice.
Changing how Cash is Handled. Many banks and credit unions are seeing higher levels of ATM usage as Americans pull out cash at a greater than usual rate, despite the media advising that “stockpiling cash” is unnecessary. These reactions may not seem so extreme when we remember that cash has seen people through other crisis (hurricanes, tornadoes, power outages) when other forms of payments have become inaccessible. However, the scramble for cash is problematic for some institutions that, with branches closed, have restricted access for armored carriers to load currency to their rear-access through-the-wall ATMs.
In a post COVID-19 world, financial institutions will need to re-evaluate their cash delivery systems. This may mean making changes to the types of ATMs they have available or increasing the number of machines which their account holders have surcharge-free access.
The COVID-19 pandemic has been a wake up call to our current society. While we are busy reacting to the current situation, banks and credit unions should also be using this time to develop future disaster mitigation and branch transformation plans and thinking about cost-effective ways to provide more self-service options for account holders. Just like after 9/11, a post COVID-19 future may look very different and we need to be prepared.
To learn about self-service options available today for financial institutions that will help with social distancing, download our infographic: Self Service Options for a Post COVID-19 World.