As the world continues to battle the Covid-19 Pandemic, it can be said that in a matter of months, the economic outlook has changed. It has a deep financial impact on the industry, with depressed margins, staffing problems, branch closures, spikes in a merger, and shifting to e-channels. This article is about the impact of COVID-19 on the Retail Banking Industry, likely reaction of the industry, and the changes to consider in the new reality.

The impact on the industry can be briefly summarized as follows -

1. Impact on Health – With the continuous increase of COVID Cases in the USA, hospitals are being overburdened. The health institutions are running out of personal protective equipment, and there is a shortage of treatments.
2. Economic Impact – All cities and states are in lockdown except for essential services, and unemployment rates have increased by a factor of 10. Banks have faced recession, and 30% of unemployment has been forecasted in Q2 by St. Louis Fed. The economic impact as analyzed by Mark Zandi of Moody’s Analytics can be forecasted in four waves Cessation of Economic Activity, Job Losses, Consumer Retirement Panic- people will panic when faced with retirement planning, and Business Investment cuts.
3. Member Impact – With the loss of income, closure of educational institutions, increased demand for remote payments, there’s a complete upheaval in everyday life.
4. Staff Impact – Similar to member impact, in addition to shifting to remote approach and loss of jobs.

The following are some of the actions that should be considered to cope with the impact.

1. Outside the Branch- Drive-thru lanes, and signs at branch doors encouraging the use of the same, plans of frequent cleaning of devices, and Sanitization of ATMs between transactions.
2. Inside the Branch – Ask clients and employees to keep a safe distance, install hand sanitizers at teller windows, rearrange waiting and platform areas, special hours for senior citizens.
3. Call Centers - Adding more capacity to reduce more face to face time is a way to go about it. To help with increased calls from the members, the working hours can be extended.
4. For members and staff It is essential to keep them updated and communicate consistently. Seek advice on best practices and publicize them. Support lines can be offered to get information and support. To assist with cashless transactions, credit cards should be offered to those who do not have access to the same. Put actions like waiving fees and deferring loan payments into place.
5. For communities – Make donations to food banks, be a good neighbor, and check on elder members regularly.

Some additional features and measures that can help in this impact are utilizing automated services like automatic chatbots, video chats, which will help staff and employees to work remotely. These features depend on the capacity of the institution to run them, but in the presence of the capacity, it can be implemented.

Things are likely to change permanently in the future. It is best to take quick, well planned, and transparent actions keeping in mind what is best for the members.

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