BY KAUSAR IKHLAQ
Ever since the outbreak of COVID-19 Pandemic, the World is encountered with financial turmoil. Whether it is related to borrowing which are followed by lower interest rates to businesses that are having a dip in their profit margins and low sales.
Borrowers all over the world are looking towards the banks and financial institutions (locally) for help in this period of global crunch. Local Federal Banks have lowered the interest rates for the sake of increased number of borrowings to be facilitated by local commercial banks.
Along with the financial impacts of the pandemic, the financial institutions need to safeguard the environment of the premises so that the staff and the customers are not affected by the virus. Globally, most of the banks and financial institutions already started functioning remotely.
Banks are mostly diverting the customers towards the alternate distribution channels (automated teller machines, internet banking, call centre services etc.) to avoid the maximum human contact, which is the main cause in the spread of virus. Coronavirus has challenged the conventional banking practices as it is the fastest means to spread the virus within the community.
According to the World Health Organization (WHO), currency notes can be the most dangerous and quickest means proven in the spread of COVID-19. It has been advised to avoid currency notes for payments and use some other mode of transaction, as it may become the carrier of the virus for a couple of days.
Various banks practised different techniques to overcome this challenge, globally. For example, Korean bank kept the currency note issued from local banks for 15 days in isolation to minimize the risk of infection. Similarly, China and United States government announced a protocol of isolating currency notes for almost ten to fifteen days period which were in circulation, lately. Not only the currency notes are a threat but same is the case with the conventional banking practices.
The Centre for Disease Control and Prevention has issued a set of Standard Operating Procedures (SOPs) according to which there should be a minimum six feet distance between the two persons. Such kind of distance maintenance is not an easy task to be managed within the branch premises all the time. In fact it is not safe when the banking transactions can effectively be conducted via Alternate distribution channels (ADCs).
COVID-19 has forcibly moved the banking towards a new direction, which is going “Digital”. Federal Financial Institutions Examination Council [1] is expecting the United States Banks to get digitized.
The total banking sector is to be working on remote basis including online banking, telephone banking, internet banking and online call centre services. Goldman Sachs traders have already implemented remote working. HSBC has gone remote in Asian branches after employees got affected by the virus.
DBS Bank Singapore has introduced “Branchless Banking” after they got some of their employees as Corona positive. It has converted 11 financing facilities to digital systems and has also been successful in launching “instant business account fund transfers”. The bank is conducting Webinars for training the employees so that they can easily get to learn the novelty of digital systems.
Small Medium Enterprise financing is available for a limit of $ 50,000. This initiative has been taken to facilitate the borrowings and relieve the borrowers, to some extent, in this pandemic situation.
As per the survey of Lightico, 56 percent customers have asserted polled that they were sent back to their bank branches for the completion of transactions from the online points. While 48 percent polled that they were made to print, sign and email during their transactions when they were banking online.
(The Writer is MS Marketing with rich experience in Marketing concepts and practicalities of industry. She also has experience of Sales trainings and social media campaigns at social media platforms. She can be reached at kausariqbal82@gmail.com)
