COVID-19 is creating disruption across the world, bringing unprecedented change to daily routines, local infrastructure and the global economy. While some industries have been highly vulnerable to the resulting economic shifts, financial institutions play a key role in helping our economy and communities get through the current turmoil and prepare for a strong return.
Banks and credit unions have the opportunity to help stabilize the economy, enable continued commerce, keep small businesses afloat and provide needed support for people struggling with lost income.
By serving as leaders in a dynamic and uncertain time, financial institutions are not only doing the right thing, they're also creating a stronger future for themselves and their communities. How banks and credit unions act now has the potential to determine their place in local communities in the coming decade.
From immediate actions that focus on keeping their businesses running smoothly to mid- and long-term plans for helping staff, customers and members navigate the ever-shifting complexities of this new environment, five key objectives are top of mind for financial institutions.
By serving as leaders in a dynamic and uncertain time, financial institutions are not only doing the right thing, they're also creating a stronger future for themselves and their communities.
1. Maximizing Effectiveness in New Working Conditions
The new coronavirus has brought incredible disruption to the way we all live and work. Many financial institutions are requiring employees work from home temporarily, which can introduce new risks that need to be effectively managed. While financial institutions have already taken the essential first steps, such as ordering laptops for their newly remote teams, next actions may include reviewing remote network access needs and security coverage to identify areas of vulnerability in this new environment.
Financial institutions may also consider upgrading collaboration tools. Technology can help streamline processes, ease frustrations and lift the spirits of staff members so they can better serve customers and members. For example, introducing a digital tool accountholders can use to schedule appointments with a loan officer, in addition to a platform the loan officer can use to host virtual meetings, can make the entire process run more smoothly.
In some respects, financial institutions are solving for the coming months, assuming they can return to business as usual by that time. But they may find investments made to create smoother processes today will create superior ways of working overall. Financial institutions may also identify long-term strategic implications as they adjust business continuity plans to reflect the possibility of multiple team members being out simultaneously.
For example, banks and credit unions that run their technology stack in-house may consider outsourcing to a managed technology model. Similarly, the value of using robotic process automation and real-time fraud solutions to lessen reliance on human intervention for critical processes will become clear.
2. Building Trust Through Strong Communication
Communication is key, and a financial institution's ability to reach customers or members with important updates about their accounts, digital banking and payment options, and safety and security measures will help build trust. When rapid developments prompt financial institutions to scale back on branch hours, shift to drive-through-only options and temporarily close branches, those updates need to be swiftly communicated.
Real-time alerts can deliver critical updates via email, text message or mobile push notifications, based on preferences set by accountholders. Additional updates, such as new cleaning processes to keep branch visitors safe, can be broadcast through in-branch signage, social media posts, updates to scripted phone menus, account statements and website banners.
Multiple methods should be considered for communicating digital options to manage financial tasks from home. Video tutorials and e-learning options can help first-time users become comfortable navigating a mobile app, for example. Instant-messaging support options can provide a quick alternative for staff to answer questions and troubleshoot problems.
In addition, banks and credit unions should consider adjustments to ATM and remote deposit limits. Communicating clearly any changes can prevent accountholders from coming up against restrictions that result in frustrated support calls. Those efforts will help deepen relationships and keep call center volumes manageable as consumers and businesses adopt more digital services.
With in-person visits minimized, a financial institution's digital presence is truly the face of its organization.
3. Re-evaluating Digital Capabilities in Light of Social Distancing
With in-person visits minimized, a financial institution's digital presence is truly the face of its organization. Now is a good time for banks and credit unions to take stock of their websites and digital tools, refreshing as needed or adding perks such as credit score monitoring to help accountholders feel reassured in a time of increased fraud.
Digital capabilities make accountholders' lives easier, especially now. Person-to-person payments, for example, can help accountholders pay friends and family when they can't visit them in person. Adding new features that drive digital engagement can create lasting shifts in use and adoption of lower-cost digital channels.
4. Protecting Against Heightened Risk and Fraud
Unfortunately, fraud thrives in times of fear and uncertainty. There has been a massive increase in domain registrations and phishing attempts related to COVID-19, with criminals often indicating that attachments containing malware are related to important information about the virus.
It's critical to have safeguards in place to protect assets from criminals looking to profit from the theft of sensitive data or the threat of shutting down a financial institution's operations. Layered cybersecurity with 24/7 monitoring, management, detection and response is key to protecting the entire IT infrastructure.
Equally important is securely accommodating the growing volume of digital banking activity without sacrificing the convenience of frictionless self-service. With more people interested in opening accounts, enrolling in online or mobile banking, or resetting a forgotten password from the safety of their home, managing account fraud and debit risk is more important than ever.
Data sharing between banking channels and across financial institutions can help pinpoint fraudulent activity. Real-time alerts can help accountholders monitor for fraud, using notifications to track account activity and report suspicious activity immediately.
5. Being There for the Community
Financial institutions can help offset the anticipated economic effects of the pandemic through continued lending to businesses and consumers, helping to spur economic activity and extending support for those in need.
For example, many financial institutions are deferring payments and interest on loans and credit cards, extending credit limits and payment deadlines, waiving late fees, and lowering minimum payments. Some have pledged to not report missed payments to credit bureaus and are suspending auto repossessions and home foreclosures.
Financial institutions are also issuing new loans to small businesses and helping individuals refinance mortgages at today's low rates to free up liquidity for those facing reduced or lost income. These are extraordinary times, and financial institutions can go even further to consider new, unique and even unprecedented actions. Perhaps they'd like to donate to a relevant cause, sell gift cards to support local businesses, organize a digital fundraiser with donation matching or even use branch sites as a pickup location for donated groceries.
Part of the Solution
Elements of today's economic climate are reminiscent of the financial crisis of 2008, including substantial economic stimulus packages and fears of negative interest rates. In that recession, banks suffered criticism for playing a role in contributing to the crisis. This time, financial institutions have an opportunity to serve as beacons of stability and reliability.
Many are already taking steps to defend against growing fraud concerns, ensure the smooth adoption and utilization of digital tools, and support small businesses and individuals who are financially affected. Those important actions will help stabilize local communities and distinguish financial institutions as pillars of their communities for years to come.