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In the midst of Coronavirus uncertainty, we must be mindful of what we can control and how we want our story to be read.

With a soundtrack of COVID-19 news stories playing nonstop in the background, last week felt like watching a magnitude 9.5 earthquake off the coast of an island: a disaster that we all knew was remotely possible but still felt shocked by with every passing moment.

In the back of our minds, we know the worst is yet to come. The countdown to the economic tsunami has started and we now hold our collective breath hoping the scale and length of imminent damages doesn’t come close to worst case projections.

Companies have done a respectable job with immediate responses to COVID-19 once cases were being reported across the country. Many pulled out their business continuity playbooks, took actions to ensure the safety of employees and customers, and started preparations for what’s to come. But how can we prepare for the unpredictable? Even the relatively good scenarios mentioned by experts are a dramatic departure from just two weeks ago and contain a tremendous amount of uncertainty.

Our course of action is to understand what we know, acknowledge what we don’t know, and be decisive as we balance the two.


What We Know: There will be a recession.
What We Don’t Know: How bad it will be.

In fact, it’s already here. An economic report from the Labor Department on Thursday showed an increase of 70,000 new unemployment claims from the first week of March – a 33% rise. Unlike with the Great Recession, the layoffs are beginning in the service, travel and hospitality industries. The impact is largely to workers living “paycheck to paycheck” rather than the white-collar workers of Wall Street (for now).

Estimates of economic contraction in the second quarter from Goldman Sachs, which started at 5%, have shot up to 24% as of March 20. The United States started responding about two months late, and widespread testing only become available in the last week. It is anyone’s guess how much the virus has spread already, and if there are any adjustments to economic forecasts over the next few weeks, they will only be worse.

Decisive Action: Plan for the bad, model for the worst, hope for the best.

The newly unemployed and underemployed are already calling their financial institutions for relief. Small businesses have already made decisions about which bills will go unpaid if there aren’t concessions. Retail-oriented banks and credit unions should estimate percentages of customers who will be impacted based on industry codes. Commercial banks need to assess customer cash flow changes and cash on hand.

In most cases, handling calls for assistance on a case-by-case basis will not be sufficient. It simply isn’t scalable, will take too long, and runs the risk of inadvertent unfair treatment when done frequently. Establish temporary relief options that can be accepted without multiple layers of executive approval.

If the Great Recession taught our industry one thing, it was stress testing. Model based on bad, worse and worst projections with the most recent data. It’s impossible to set a definitive course of action for now but the combination of analysis, relief packages and modeling efforts will aide in scenario planning that can be quickly invoked as the economic picture becomes clearer.


What We Know: Customers must do business online and by phone.
What We Don’t Know: How quickly it accelerates what was already happening.

Businesses across the country are being forced to temporarily close and millions of citizens are coping with the shift from social distancing to mandatory stay-at-home orders. Cornerstone Advisors has been a broken record telling the story of a community banking industry that’s falling behind in online and mobile capabilities. Our long novels about slowly losing ground to the mega banks just became an audio book to be played on high speed while walking between the kitchen and home office to refill on coffee.

Banks that were once “too big to fail” aggressively used their scale and evolved into “too big to lose.” Their investments in digital channels have paid huge dividends and made community banks appear archaic to many consumers. In a 2019 investor relations document, Chase reported that about 1.5 million accounts had been opened online in the last year and 75% of all new customers are mobile-active.

Now that COVID-19 is literally forcing all customers to work with banks remotely, the threat of more convenient alternatives is haunting. And what will branch traffic look like once restrictions are removed? Will the last bastion of branch-goers be converted to digital acolytes? Will the fear of potential future lockdowns sway their old preferences?

Decisive Action: Remove friction from digital journeys of primary revenue streams.

Break down the largest drivers of interest and non-interest income and ask respective owners to report back high, medium and low risk if those streams had to be completely digital. How much effort does it take to open an account or apply for a loan? How well are we doing at making sure our debit and credit cards are at the top of digital wallets as Amazon hires 100,000 new workers to handle online orders? IT departments will be very busy keeping the lights on with an entirely remote work force, so the limited remaining project capacity must be wisely prioritized with a limited set of digital enhancements.


What We Know: Most employees must be productive from home.
What We Don’t Know: How long it will last or if it will be repeated in the future.

Pets on webcams are a normal part of business meetings. Finally! Unfortunately, this is a new norm for many companies. Moreover, according to the highly respected Imperial College, there will be a need for lockdown measures in place for 12 to 18 months until a vaccine can be developed. To be very clear, the current protocols are in place to slow the pandemic and prevent hospitals from being overrun. Medical experts are indicating that it’s not just possible, but virtually guaranteed that localized lockdown measures will be needed in regions where COVID-19 reemerges in the future.

Decisive Action: Take steps to enable and encourage remote collaboration.

It’s the company’s responsibility to ensure individual employees and multi-person teams have the tools and guidance to stay productive. Laptops and proper bandwidth are the easy part. Getting a workforce reliant on in-person meetings to maintain effectiveness in an entirely remote environment overnight is much more difficult. What collaboration tools do employees have to work with each other today? Hint: “Phones and email” is NOT a sufficient answer. Tools like Slack have gained popularity for years and competitor Microsoft reported Teams now has 44 million daily users, which is up by 12 million in just one week!

Business continuity plans need to expand beyond typical natural disasters. My colleague Ryan Brogan appeared to have some insider knowledge in his recent Contact Centers in the Cloud article when listing disaster recovery as a benefit just one month ago (an anonymous whistleblower has notified the SEC to investigate his trading activity). One example is some clients reportedly purchasing additional Salesforce licenses to quickly staff up their inbound calling lines. If further business interruptions are expected, then our architecture must able to support the new norm as well.

The World Will Never Be the Same

I’ve been asked to predict the impacts of COVID-19 for the remainder of the year. My answer is simple – I can’t. Much less can anyone predict the long-term ramifications of a period in time that will undoubtedly be cemented in history and made into countless case studies for graduate schools. We must be mindful of what we can control and how we want our story to be read. Future business students will feel empathy for the victims and admiration for quick responders. But they will want to be the leaders who took decisive action and came out stronger for it.

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