THOUGHTS

Covid-19: Potential Implications for Companies in the Banking Industry

Apr 6, 2020

The coronavirus outbreak is causing widespread concern and economic hardship for businesses worldwide and the banking industry is hardly an exception. China has been the worst hit, followed by Europe and the United States of America. While the duration and future impact of the coronavirus outbreak remains uncertain, major banking companies have already adopted business continuity plans such as establishing a central task force, suspending large-scale gatherings, and making arrangements for teleworking.

However, these basic steps and actions can no longer help banking companies to maintain profitability and smoothly run their operations. For banking companies, enforcing a sound business continuity plan is the key to survive through these tough times and emerge stronger in the future. To help save your business from the ongoing crisis, our market research experts have outlined the strategies for banking companies to respond to the coronavirus crisis.

Covid-19 pandemic is impacting the banking industry in multiple ways, from workforce and business continuity issues to client service considerations. Our market intelligence experts can help you to create strategic plans to combat the covid-19 challenges with resilience. Request a FREE proposal here.

Banking Industry: Practical Steps for Responding to the Coronavirus Crisis

Normalize workforce measures

Labor shortage issues in the banking industry are putting high pressure on business leaders to run operations smoothly. This further results in greater delays and subsequently, customer dissatisfaction. Today, major banks have adopted proactive measures such as emphasizing workplace hygiene and offering alternative ways of working, but banks will need to make sure that the measures they have taken are designed to get the best out of their employees while preserving their mental and financial well-being. These involve ensuring deep cleaning of all branches, identifying infected individuals, ensuring continuity of main services with minimal staffs, and monitoring customer service capacity against need.

In cases of trading activities, execution is becoming difficult for companies in the banking industry owing to constraints in working remotely because of technology and compliance requirements. To tackle this challenge, some banks have segregated employees and activated business continuity plan sites. However, in the case of this prolonged crisis, banking companies will need to take backup plans that include the potential to move immediately to a work-from-home model. Also, banks should train segments of employees for whom working remotely is possible for the new working environment. Subsequently, companies in the banking industry must make sure that both employee relations and internal technical support are sufficiently staffed and trained to accommodate elevated levels of business. Besides, companies in the banking industry must consult with risk management service providers to employ risk management strategies.

Analyzing and combating business risks is not an overnight task, it requires proper planning and execution. With over 15 years of experience in devising risk management strategies for organizations across the various sectors, we can help you to create an ideal business risk management framework for your organization. Contact us here.

Provide essential banking services to retail customers

At this critical time, people especially the old generation who are less likely to adopt digital channels, will need essential banking services such as ATM operations to fulfill their daily needs. So, banks must ensure to continue branch and ATM operations, without compromising the safety of employees. Besides, banks must continually assess consumer demand for in-person services and adjust capacity accordingly. For instance, the Chinese government adopted strategies like providing limited services to customers, other than ATM access. Besides, banks in Hong Kong, Italy, and Germany have reduced working hours and are operating with minimal staff.

At the same time, companies in the banking industry must try to encourage customers to leverage digital channels for banking needs. This can be done by increasing the limit of online activities and providing tutorials online. However, a shift to digital banking may increase fraud and information security risks for companies in the banking industry. Therefore, banking companies should consider implementing risk management strategies before the widespread adoption of digital banking services.

Banking industry

Support households and businesses with credit

As individuals and businesses who are already in debt are more likely to be financially impacted by the quarantine measures and lack of employment, companies in the banking industry should support their liquidity needs through credits. From a credit perspective, banks must identify sectors that are highly affected by the coronavirus outbreak and offer supports. This can be done by engaging with clients to understand their issues, segmenting customers based on their needs, and adjusting risk mitigation actions accordingly.

The impact of covid-19 on supply chain operations has been dramatic, compelling major businesses to draw on credit lines to support working capital and stockpile cash. Consequently, adopting strong internal liquidity-management practices will be required for banks to effectively support market liquidity and changing customer borrowing needs. Besides, companies in the banking industry should stay vigilant about liquidity measures to support their customers. In addition to this, banking companies should focus on business continuity planning, rethink balance sheet challenges while managing loans, find ways to trim costs, and replot the post-covid-19 strategy.

Want to understand the potential impacts of the covid-19 pandemic on your organization? Request more info and our experts will get in touch with you with comprehensive insights.

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