How is COVID-19 Changing The Way We Manage Money?
The COVID-19 pandemic has, in many ways, changed the way that we run much of our daily lives. The amount of day-to-day contact we have with other people is easy to underestimate. However, it seems that many of us weren’t aware of what we’d lose once lockdown took full effect.
One of the aspects of everyday life that have changed dramatically is banking. From simple personal banking to business finances, withdrawing and depositing funds is no longer such a simple endeavor. Or is it?
This coronavirus age is forcing many of us to rethink how we approach people physically in everyday life. Since March, it’s not always been the safest or healthiest option to head to a bank teller for financial support. The pandemic has brought about some interesting changes, on the whole, and they are worth looking at in more detail.
Banks are rethinking everything from ATM solutions to loan and investment management. Here are a few of the biggest knock-effects.
Traditional Payments Are On The Decrease
In the US, the impact on ‘traditional’ financial transactions is already apparent. Studies show that up to 30% of people may have stopped using cash altogether – relying on digital alternatives instead. That doesn’t just impact paper money and coins, as it appears more of us are also leaving cards behind.
It is e-wallet services, such as those provided by PayPal, leading the way in the digital money revolution. Not only that, but around 24% of survey respondents are reportedly considering moving away from physical money for good at the end of the pandemic. While it remains unclear when that might be, it’s interesting to see that digital financing has had such a lasting, positive effect.
Digital Telling And Selling Are Growing
Of course, physical interactions during the pandemic are under constant monitoring. That means everyday activities such as visiting a bank teller or heading to the ATM need a thorough rethink. Further survey results suggest a small yet growing number of the public are already ahead of the curve on this matter.
Data shows that at least 18% of people will be considering dropping everyday bank interactions post-pandemic. The US tends to fall below the average number of people who are no longer using physical banks in this climate, at around 38-39%. More than half of British consumers, by comparison, have ditched the physical bank, with approximately 65% of Brazilian bankers doing the same.
All this means that more and more people are likely to be reliant on apps and mobile banking. That causes the strain on said software, as well as mobile devices, to be increasing. It’s great news for digital banking platforms. Still, if around 18% of people are keen to drop physical banking for good after a vaccine arises for COVID-19, app-ready businesses are going to need to bolster their services for ever-growing demand.
Banks Are Lenient – To An Extent
Leniency during these difficult times is widely welcoming. Those banks and lenders already running popular digital platforms are ahead of the curve. So too are those that are wholly online and those willing to pivot to help support their customers.
In many ways, the pandemic is ushering in a decrease in spending, at least on what many might deem ‘non-essential’ products. Some banks, too, have shown incredible leniency in offering customers and members the option to delay paying for loans and mortgages until a later date.
‘Mortgage holidays’ in the UK, for example, have become relatively common. However, banking brands need to work on a long-term strategy to support their customers and stay afloat. The pandemic is continuing to roll forward. At the time of writing, the US is in the middle of peak election fever. It is unlikely that any significant changes will come in the form of fiscal support until after November, more likely beyond the holiday season.
Things Are Changing – For The Better?
It’s clear that the pandemic is helping to introduce everyday people to various flexible ways to manage their lives. Whether it is working from home or banking on the move, more power may find its way into our palms in the months to come.
If further digital banking changes aren’t expected to help with pandemic restrictions in the short term, do not be surprised if banks sway towards newer digital models to support people if a crisis such as this happens again in the future. If nothing else, COVID-19 is helping to usher in digital replacements for everyday tasks quicker than we expected.