Branch Transformation

Post Covid-19: A wake-up call for financial institutions and credit unions

With restrictions being lifted from the Covid-19 pandemic lockdown, financial institutions and credit unions should be thinking about how they will prepare for the "new normal" in a post-Covid-19 world.

photo provided by iStock

May 5, 2020 by Justin Van Peursem — President, MVP Financial Equipment Corp.

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 have closed branches, limited hours and waived fees 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. It's becoming clearer that social distancing could be a matter of life and death, but how can an institution still be customer friendly while keeping staff and customers safe? Banks and credit unions need to find a balance and take into consideration the following points to prepare for a post-COVID-19 world.

Prepare a pandemic response plan

The Federal Deposit Insurance Corporationreleased an official "Influenza Pandemic Preparedness Interagency Advisory" in 2006 as a response to the outbreak of avian flu in Asia. The Federal Financial Institutions Examination Council issued additional guidance around pandemic planning in 2008. While many banks and credit unions are currently using this guidance today, 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 been safe and popular channels throughout the current pandemic.

Reworking branch transformations

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 customers 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. Internal self-service machines cannot be used by customers if they are inside the securely closed and locked doors. Post COVID-19, branch transformation implementation will need to speed up. 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.

Educate staff and customers on the safety of cash

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 than cash. In a post-COVID-19 world, many consumers and financial institutions should reevaluate how they are presenting and supporting consumer payment choices.

Change how cash is handled

Many banks and credit unions are seeing higher levels of ATM usage as customers withdraw 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 crises (hurricanes, tornados, power outages) when other forms of payments have become inaccessible. However, the scramble for cash is problematic for institutions that needed to close their branches but had 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 reevaluate their cash delivery and handling systems. This may mean making changes to how cash is delivered and received, the types of ATMs they have available, the way employees handle the cash, cash recycling or increasing the number of machines but give surcharge-free access.

The COVID-19 pandemic has been a wakeup call to our current society. While we are busy reacting to the current situation, banks and credit unions should be using this time to develop future disaster mitigation and branch transformation plans as well as thinking about cost-effective ways to provide more self-service options for customers. As the world changed after 9/11, a post-COVID-19 future will look very different than what we were used to and we need to be prepared

For more information on how the coronavirus has affected the ATM industry click here.

About Justin Van Peursem

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Co-founder and CEO, Justin Van Peursem leads MVP financial Equipment drawing on his many years of experience working in the ATM industry. He combines the smart leadership styles of leading by example fused with strong hands on guidance. His company wide emphasis on integrity, quality of workmanship and attention to the customer needs, forges a clear path forward for team MVP to follow.

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