Commercial Loan Automation
Small Business Banking
BirdsEye Viewwhat are banks doing about covid-19?
The plague is upon us, and we’re all struggling to deal with it and decide what is the right thing to do.
We held our first HR conference call on the topic, and several themes emerged.
1. Work from home. Not all bank jobs are suited for a WFH solution, but many are. Some banks have transitioned 90% of their workforce to their homes. Some have emptied out their entire headquarters building. Others are rotating employees in-and-out of the bank.
Those who are practicing WFH are looking to expand it and are testing their systems to ensure they can handle the additional communication load.
Call center is a perfect WFH candidate, and many banks have already put such procedures in place for their call center bankers.
2. Social distancing. Banks are looking for different solutions for those employees who can only do their job at the bank and cannot WFH: branch, wire, item processing etc. Some banks are rotating employees weekly to mission-critical jobs. Others are splitting workgroups into smaller units, 10-25 at most. Others allow a single person per floor to come in and handle basic tasks such as opening the mail. Some banks reduce worker groups to 10, others to 5, but not everyone has enough space to facilitate such distancing.
3. Branch closings. Some banks are closing some branches; others are closing all their branches. Those who have in-store branches are working with the newly reduced hours of the stores. Some banks are instituting a drive-up only branch policy. Others are using their ITMs to replace in-branch staff. Many have moved to a skeleton crew, often only two people, to handle safety deposit box servicing, loan closings etc.
4. Employee initiatives. As scheduling becomes a greater challenge, some banks see organic solutions emerge. Employees themselves trade hours to facilitate child care, finding ways to address corporate needs while helping each other’s family stress points.
5. Social support. Most banks are in areas where school closures are widely instituted, many for at least a month. In addition to WFH solutions, other ideas such as having local students help with child care and home schooling are being implemented. This is the time for creative thinking.
6. Keeping employees busy. As customer traffic grinds to a halt, what should on-site and remote employees do? This is a perfect time for customer outreach activities, which many banks are initiating.
7. Marketing-specific handling. Not all banks serve homogeneous communities. Their solutions are often, appropriately, community-specific. They want to mirror the communities they serve.
8. Morale. Not enough is being done to keep morale up and keep employees engaged during these harrowing times. There is tremendous uncertainty about EVERYTHING – how long will this last? Will I get sick? Will my life savings evaporate? Will the cruise I’m hoping to take next year still run? Employees and Americans all need comfort and hope, a sense of control. Management needs to spend time and emotional resources toward that end.
This is a good time to train your management team on leading during turbulent times, something they might not have been prepared for in the past.
9. Communication. Many banks instituted daily management calls. Broadening the call circle is helpful, especially as you communicate news with employees. Use Teams, WebEx, Skype and other tools which increase engagement through visibility. It IS necessary!
10. Pay. There is no common practice as to how long and what the bank should pay. Almost universally, everyone is paying for quarantine time. But many questions remain open:
a. Is it fair to pay differently for jobs which must be done on-site vs. jobs that can be done at home?
b. How long should you pay?
c. Should there be any changes to PTO and sick leave policies, duration?
d. How about Pandemic pay? Some banks provide 40 hours’ pandemic pay outside of PTO (use should not exceed 20 hours per week) to facilitate child care as schools are closed.
e. Should you pay for family care when someone has a family member with symptoms?
f. Should you pay PTO for high-risk employees?
g. How do you separate COVID from flu or even allergies?
h. Should you pay for quarantines of employee self-initiated travel? Most banks do not pay for employees who elect to take that risk against company policy and government advice.
Conversations at our forums yielded other great ideas and best practices:
• Develop talking points to address customer concerns. Utilize less-busy staff to proactively communicate with customers.
• Send your commercial customers information packets which you already have developed internally to use in their own businesses, first vetted by your legal team. Utilize best practices and lessons from other large providers such as airlines, hotels, Grubhub and others.
• Suspend or vet all vendors. Use a central area to clean all equipment and examine printers, desktops etc.
• Ask your mission-critical vendors for pandemic plans.
• Develop a plan for branch closures as more people get infections. For example, if a branch has 30% of their staff on leave, close the branch and consolidate into hubs.
• Expand your cash supply just in case, and overload ATMs with cash. Increase frequency of ATM servicing and cleaning.
• Proactively offer credit to employees whose hours have been reduced.
• Proactively offer overdraft advances and other funding to your business banking customers (utilizing your credit scoring process).
• Prop your doors open so no one has to touch them.
• Buy extra laptops to facilitate WFH.
• Have a person cleaning the call center 24/7 to reduce contagious opportunities and keep high-use surfaces germ-free.
Our friends and experts at Wachtell, Lipton shared this communication for bank directors:
As the world reacts to the COVID-19 pandemic, directors on corporate boards play a vital role in navigating the path forward. Key issues facing corporate directors include:
1. Maintaining close contact with the CEO and working with management to ensure the safety and well-being of the company’s employees and other stakeholders as well as the public at large.
2. Understanding the risks to the company and its stakeholders from the COVID-19 pandemic, and discussing, as a board, management’s strategies for minimizing and mitigating these risks.
3. Reviewing the viability of the enterprise from a short-term and long-term perspective and making appropriate changes to the corporate strategy to ensure that viability.
4. Receiving a board-level briefing on company indebtedness, including bank and bond financings, lines of credit, availability of revolvers, key covenant terms and, in conjunction with that briefing, understanding the company’s near-term liquidity needs and working with management to secure liquidity needs.
5. Appropriately messaging the company’s actions with respect to the crisis and providing the CEO and management with assistance in handling communication with internal and external constituents.
6. Communicating frequently with, and seeking guidance from, applicable regulators and other government agencies with oversight.
7. Responding to activist attacks and other actions by those seeking to take advantage of the situation and promote their own agenda.
8. Evaluating opportunities for transactions that are made available by the changed circumstances.
9. Working with management in engaging shareholders and other stakeholders on corporate operations, impact to strategy, and other important concerns, including ESG issues such as climate change and sustainability.
10. Reviewing compensation plans and considering whether changes are required, particularly with respect to equity arrangements, unforeseen employee cash needs and mission-critical personnel.
11. Evaluating the company’s current and future dividend and buyback policy as well as capital allocation and liquidity generally.
These times present us with unprecedented challenges. The uncertainty associated with so many unknowns – how long will it take, how bad will it get – weighs heavily on individuals and markets alike.
I see some silver linings in this situation, though. Here are two simple ones:
• More customers will start using remote channels. Let’s give them reasons to continue doing so for routine transactions and account openings.
• More employees will get used to working from home while remaining effective.
Let’s use this opportunity to get better at both: improving the remote customer experience for all products and bank touchpoints, and further facilitating and welcoming WFH solutions for employees.
In the meantime, stay safe and healthy.