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“When will the consumer want to start traveling
again, when will the consumer want to go back to work, when are
they going to start spending in general, because that then
dictates the health of the banking industry,” these are the
questions, said Richard Hunt, president and CEO of the Consumer
Bankers Association.
What the industry will look like, on the other hand, is a
different question. Hunt says some trends had already started
when the pandemic hit.
“We’ve been knowing for years now that you can do ninety-nine
percent of your banking on your iPhone,” Hunt said.
It’s a reality to which many customers have
adapted without much choice due to COVID-19.
What else to expect? Branch consolidation.
“I just call it closing of branches,” Hunt said.
It’s another trend that was already underway in 2019. Some
things are bound to be as they were before the pandemic:
Automated tellers – and more of them. Customer retention
incentives, such as free counter checks or waivers on certain
fees, are also sure to return. According to the Federal Deposit
Insurance Corporation, large U.S. banks took in $36 billion in
account maintenance fees the year before the pandemic.
And how might small banks fare differently than large ones?
Micah Bartlett, president and CEO of Town & Country Bank in
Springfield, Illinois, the advantage for community banks remains
in the business sector and for precisely the same reason many
consumers will always prefer smaller, local institutions for
retail accounts: familiarity, relationships, and face-to-face
encounters.
Bartlett agrees that digital banking’s place in the market has,
out of necessity, become better established during the pandemic,
allowing community banks to offer a variety of service options
to retail customers while, at the same time, addressing the more
nuanced needs of small and local businesses.
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