If COVID-19 has taught us anything, it's that success hinges on the ability to adapt in the face of adversity. Indeed, with over 82% of counties in the U.S. on lockdown, according to analysis conducted on behalf of The Wall Street Journal, businesses have had to be innovative when it comes to their operational and service models to maintain some semblance of normalcy in a world that is anything but "normal." Strategic process changes have helped them maintain productivity, manage overhead and reduce the risk of infection.
That said, these efforts haven't entirely shielded industries from financial fallout, and the banking sector is no exception. The financial industry's bottom line is under pressure and decision-makers at every level have gone into intensive strategy mode just to ensure they will come out on the other side of this ordeal as unscathed as possible. Here are a few of the ways banks in the States and abroad are managing the situation:
1. Hiring where it makes sense
Sometimes you need to spend money to make money. One of the effects of lobby closures has been an uptick in remote banking, driving a minor hiring boom for some financial institutions. With shelter-in-place orders, the sudden influx of customers over the phone or via the internet has been met with long service wait times and low customer satisfaction at some FIs. To battle this, several organizations are in recruitment mode, and justifying the investment with associated revenues. For instance, Fifth Third Bank, which currently operates more than 1,100 full-service banking centers in 10 states, seeks to hire around 1,000 applicants to fill various positions, including retail, mortgage sales and operations, the company announced in a press release. Ensuring customers remain fully satisfied through responsive customer service can improve retention.
"Several banking organizations are in recruitment mode."
Fifth Third Bank President and CEO Greg Carmichael said these newly created positions should help to speed things up with more staff available to handle questions and concerns.
"We continue to take good care of our employees so they can continue to take good care of our customers," Carmichael explained. "Now more than ever, our customers are counting on us to provide them with the financial expertise and essential banking services necessary to navigate uncertainty."
2. Banking on growth in loan volume
With virtually no money coming in, many business owners are unable to address ongoing expenses – be it for payroll, inventory or monthly rent – despite federal assistance plans. Missed payments can snowball and adversely affect credit, making it harder to secure new loan approvals. However, federal regulators may move to relax bank liquidity regulations temporarily, which would allow FIs to lend to borrowers they likely wouldn't in normal circumstances, CNBC reported.
Unfortunately, the future remains unclear, as this move requires the go-ahead of several governmental organizations, including the Federal Reserve as well as the Office of the Comptroller of the Currency. If loosening is tabled, a possible alternative would be extending the effective date of the Current Expected Credit Loss standard. Critically: FIs looking to extend credit to these customers need to understand how regulatory guidelines will impact recouping strategies, and modify their service model accordingly.
3. Cutting operational hours
The impact of COVID-19 on branch operational hours is undeniable and has shaken up many FIs. In recent years, a good number of community, regional and national institutions have extended business hours well past 5 p.m. to enhance convenience for customers working later in the day. For many banking organizations, this was a feather in their cap when it came to service, a way to distinguish themselves from the competition. But with foot traffic slowing to a trickle, FIs are reducing their hours of operation, the Journal reported separately. While no one relishes offering less availability to customers, cutting operational hours in the short term helps minimize the cost of overhead until banks can weather the storm.
4. Central banks buying bonds
Before COVID-19 struck America, several countries in Europe felt the adverse physical and economic health effects, including Italy, Spain, Belgium and France. As a result, numerous banking entities don't anticipate they'll reach their sales goals by the year's end, including Deutsche Bank and Credit Suisse, according to CNBC. In a bid to soften the blow, the European Central Bank intends to purchase 750 billion Euros worth of private and public bonds, equal to $802 billion in U.S. dollars.
5. Optimizing efficiencies
The goal of any business is to reconcile weaknesses and boost strengths. FIs are in both observation and optimization mode to identify what's working, what isn't, and what fixes can be applied where there's room for improvement. While streamlining costs and focusing on basic operational needs is crucial to making it through these strange times, FIs should also not lose sight of future-planning. It may seem counterintuitive to invest in more advanced terminals mid-pandemic, but think of it this way: Many of these assets have integrations that both fit a contact-less culture and will get your branch in a stronger competitive position for when the pandemic passes.
We have already seen this occurring: Banks and credit unions are dedicating a lot of time and attention to drive-up, now a primary channel for customer interaction. That said, they are also revisiting the investment in customer facing technology that will fit in a post-pandemic world and enhance the in-branch experience. This united, all-hands-on-deck effort is made easier with a responsive equipment and services partner.
Life is nothing if not relentless; the coronavirus crisis is proof positive of this fact. If you're struggling to meet the needs of your customers, you don't have to go it alone. At BranchServ, service is at the core of what we do. We have the reach, know-how and resources that can help your company reach its potential and come through for your customers and staff when the pressure is on. Contact us to learn more.