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Covid-19 may change banking for good: Moody’s

first_imgModern urban skyscrapers in downtown Chicago from below to the blue summer sky. Sun reflecting in the glass facades of the urban futuristic buildings. Chicago, Illinois, USA iStock Related news The banking business will likely be permanently changed by the shift to remote working amid the Covid-19 outbreak, says Moody’s Investors Service.In a new report, the rating agency said that social distancing requirements, which pushed banks to operate remotely, have accelerated customer adoption of digital services. James Langton Share this article and your comments with peers on social media Facebook LinkedIn Twitter Ontario unlikely to balance budget by 2030: FAO A deadly first wave, followed by a tsunami of excess deaths Keywords Pandemics,  Coronavirus,  Banking industryCompanies Moody’s Investors Service G7 tax pledge may be upstaged by CBDC work “We expect some of this shift to be permanent,” it said.Moody’s found that Europe’s 35 largest banks have reported “a surge in the use of digital services from new and existing clients.”It said that most banks reported growth in both the use of mobile apps and online banking platforms in the first quarter of 2020.“They experienced increased customer interactions via online chats and emails as well as higher percentages of new clients on-boarded digitally. Digital payments, sales of digital products as well as mobile application downloads also rose,” it said.At the same time, Moody’s said the banks were quick to develop new digital products.“Banks rapidly developed and rolled out online services to support clients — small businesses in particular — through the unprecedented liquidity squeeze caused by the crisis,” it said.“Many banks have offered end-to-end digital applications for payment moratoriums, digital processing of loan applications including loans benefiting from government guarantee programs. Some banks upgraded their digital platforms and broadened use of e-signature projects.”At the same time, the requirement for social distancing has revealed the potential for cost savings at banks that are currently heavily reliant on real estate.“Several banks reported their intention to continue an extensive ‘work from home’ program once the pandemic has passed,” it said. “This follows successful implementation of remote working for a large percentage of their staff.”The report added: “At most large European banks, at least 60% of employees worked remotely during the lockdown. This could translate into appreciable cost reductions in coming years in terms of reduced office space and smaller branch networks as business is increasingly conducted digitally.”A continued shift to digital services will also require heavier investments in IT infrastructure and may increase cyber risk, Moody’s noted.last_img read more