May
11
We’re fortunate to live in an age where medical and scientific knowledge guide us toward valid preventive measures to control the spread of SARS-CoV-2. Still, it is both good business and good humanity to speculate about the world that will emerge once this horror is behind us. There is widespread agreement that it will look vastly different from the one that began 2020. As Elizabeth Svoboda put it in her recent piece for Discover,
The tsunami-like impact of a global pandemic has a way of drowning out foresight. Right now, it feels impossible to predict what the world will look like next week, let alone next year. Yet behavioral science and the broad sweep of history suggest that COVID-19 will transform our daily lives in the long run.
That’s true but not terribly useful. It’s one thing to say “The Times They Are a-Changin’.” Pinning down the change is another matter entirely.
We are not without clues. There is no disagreement that the restaurant industry has suffered and will continue to suffer immensely. If telecommuting becomes more of a norm, eateries that manage to survive lockdown will face a vast reduction in business and commuter lunches. Stay-at-home policies have driven more consumers to discover online shopping and delivery services, which will have serious long-term implications for brick-and-mortar retailers. Many gig apps have expanded their service offerings in response to increased demand for delivery services. The demand may persist if not grow but in no way promises to offset other, more widespread losses.
Our daily habits will certainly change. On April 19, PYTMS.com reported:
Our research shows that there is no guarantee that life will go back to the way it was before, even after the pandemic has passed. Only 47.9 percent of all consumers plan to resume the activities they used to do outside their homes, while another 32.1 percent say they plan to do far less outside the home than they had done before.
Continuing the theme, Market Platform Dynamics CEO Karen Webster wrote in a separate PYMTS.com article that …
… only 48 percent of consumers expect to resume their normal activities once the pandemic ends, with another 4 percent saying they will do so once they have childcare for their kids. About a third (32 percent) say they will perform more activities at home and fewer activities away from home, with 16 percent saying they won’t resume normal activities outside of the home after the crisis ends. This means 121 million American adults will not resume their activities in the same way they did before the COVID-19 outbreak. [Emphasis added.]
Adding a cautionary caveat, Webster said, “At least that’s how they feel now.” That’s important to note. People are not great at predicting their own behavior. Still, the numbers are significant, definitely suggestive, and not to be ignored.
In his excellent article for The Financial Brand, “Permanent Working at Home Will Rock Banks and Credit Unions,” consultant/advisor for Peak Performance Consulting Group Jon Voorhees observed, “Pre-pandemic about 5 million employees worked remotely in the U.S. The pandemic has driven many millions more to do so. More firms are recognizing that a remote workforce model can work successfully for their companies.” If many of those companies find telecommuting so advantageous that they opt to stick with it—which is not unlikely—the effects will be far-reaching. Voorhees suggests 10 ways that a telecommuting surge could affect the financial services industry. These include reduced demand for office space; declines in commercial construction; implications for businesses whose markets largely comprise central workforces; the subsequent toll on loan assets; and more.
Biometrics has seen a boost from growing fear of personal contact. PYTMS.com reports:
As organizations including the New York City Policy Department stop using its fingerprint ID entry for employees, there has been a spike in demand for facial recognition technology alternatives. In China, there are already reports of city buses installing facial recognition to detect COVID-19 on buses.
Banking, of course, will need to adapt to the post-pandemic world. In its latest annual World Fintech Report, CapGemini predicts a need for more effective bank-fintech partnerships:
“Businesses will evolve and emerge from the COVID-19 crisis in different and profound ways. For traditional banks, this will translate into an even greater need for digital experience through further collaboration with FinTechs. Since we began this report three years ago, FinTechs have moved from disruptors to mature players, and it is now essential for incumbent banks to consider them not only as formidable competitors, but as necessary partners of choice to meet changing consumer expectations,” comments Anirban Bose, CEO of Capgemini’s Financial Services and Member of the Group Executive Board.
We are living through an historic time, a time of upheaval. Yet upheaval can bring opportunity if we let it. The Financial Brand’s Jim Marous summed up the matter well when he recently wrote:
Banks and credit unions must use this time of disruption to consider reinventing themselves from the inside out. It is a time when we need to better understand the way consumers expect their financial institution to support their financial needs. This includes the way banks and credit unions use data, AI, technology and human resources to impact marketing, innovation and the digital delivery of products and services.
Onward.