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Coming Covid-19 Impacts to Card Portfolios

Posted by Myron Schwarcz and Larry Pruss on Jul 7, 2020 10:00:00 AM

Coming Covid-19 Impacts to Card Portfolios

Delinquencies & Defaults Brewing on the Horizon 

Despite the many uncertainties in our “now” normal, Covid-19 is undeniably changing consumer spending patterns – and it shows. According to its 8-K filing from June 1, which compares May 2019 to May 2020 payment volumes, Visa’s cardholder spend in categories like travel, entertainment, fuel and restaurants had 20-40%+ declines year-over-year, while spend in categories such as groceries, home improvement, retail sales and telecom/utilities grew 20-40% for the same period.      

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Topics: COVID-19, Card Portfolio

COVID-19 Impacts – SRM Vendor Invoice Tracking Data Trend Analysis

Posted by Jane Kendall on Jun 28, 2020 9:00:00 AM

COVID-19 Impacts – SRM Vendor Invoice Tracking Data Trend Analysis

Through the pandemic, SRM’s experts have weighed in on the operational impacts of COVID-19. We also gathered perspectives from a cross-section of banks and credit unions through a survey conducted in the early days of shelter-in-place orders (results from survey 2 coming soon). Now that the bills have come due for April and May, we noticed some unusual emerging trends in the invoice tracking data.

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Topics: Vendor management, COVID-19, Vendor Invoice

One Does Not Simply Switch Core Systems After COVID-19

Posted by Michael Carter and Bret Herbert on Jun 10, 2020 11:00:00 AM

One Does Not Simply Switch Core Systems After COVID-19

While community bankers were already weighing options on core processing and digital solution strategies before the pandemic, these decisions weigh heavily enough now to quickly tip the scales of survival. We’ve already shared our thoughts on how the “shelter in place” environment and its aftermath gave a serious jolt to any bank or credit union leader still on the fence about the importance of a robust digital backbone. 

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Topics: Digital Banking, Contract Negotiation, COVID-19, Core Systems, Core Platforms, Core Processing

Byte by Byte: Assembling a Foundation for the Now Normal Post-COVID-19

Posted by Patti Wubbels on Jun 3, 2020 9:00:00 AM

Byte by Byte - Assembling a Foundation for the Now Normal Post-COVID-19

In our last blog post, several SRM experts weighed in on the future of banking in the now normal - how consumer spending behaviors would influence branch operations and non-interest lines of revenue. In this post, we will shift our focus to big data, cyber risks and the need to reinforce legacy infrastructure.   

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Topics: COVID-19, Digital Channels, Card Branding, big data

Banking to Post-Pandemic Consumers – SRM Academy Expert Summary

Posted by Sisa Wang on May 27, 2020 9:00:00 AM

Banking to Post-Pandemic Consumers – SRM Academy Expert Summary

We are spending a lot of time thinking through the near- and mid-term ramifications of the coronavirus pandemic, especially impacts to the financial services industry. SRM has already shared several perspectives on this topic, including similarities/differences between today’s downturn to 2008’s financial crisis and financial institutions’ latest wake-up call concerning digital channels. Now, our lens focuses on what adapting to post-pandemic consumer banking and spending behaviors might look like. 

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Topics: Digital Banking, COVID-19, Digital Channels, post-pandemic, card network, Branch of the Future

COVID-19’s Digital Transformation Wrecking Ball

Posted by Michael Carter on May 17, 2020 9:00:00 AM

COVID-19’s Digital Transformation Wrecking Ball

There is a business cartoon that has been circulating around social media – a group of employees is holding court in a conference room. The manager at the head of the table declares, “Digital transformation is years away – I don’t see our company having to change anytime soon.” Meanwhile, outside the window just behind him swings a giant wrecking ball labeled “COVID-19.”  

The term “bank” never appears, but there is no sector for which the message rings truer. While the migration of banks and credit unions to digital channels has been underway for several years, of course, the national brands have been the most aggressive, creating an online capabilities gap over most community financial institutions. Given the pandemic-prompted closing of most branches and the energetic push of customers of all stripes toward remote channels, those investments by the largest institutions seem more prescient than ever. 

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Topics: Digital Banking, COVID-19, Digital Transformation

Adapting to Impacts of COVID-19 in Your Card Branding Agreements

Posted by Bob Koehler on May 10, 2020 9:00:00 AM

Adapting to Impacts of COVID-19 in Your Card Branding Agreements

It had long been predicted that the next U.S. economic downturn would be far less severe than the one triggered by the 2008 financial crisis. What wasn’t predicted, however, was the emergence of another “black swan” event like a coronavirus pandemic. Although the underlying fundamentals remain quite different, banks and credit unions everywhere should consider a few lessons learned from 2009-11 while they adapt their institution’s business model to the new norms of consumer behavior.  

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Topics: COVID-19, Card Branding Agreements

SRM Clients Weigh in on Expected COVID-19 Impacts

Posted by Michael Carter on Mar 29, 2020 9:00:00 AM

Covid blog-1

Over two weeks ago, our firm offered perspective on some things banks and credit unions can do to proactively support accountholders during the COVID-19 pandemic. Since then, we have maintained ongoing contact with our more than 1,000 clients as this situation continues to evolve. Additionally, we surveyed our industry network of clients and friends to help us understand how the virus is impacting their financial institution’s operations – and they delivered.  

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Topics: COVID-19, Coronavirus, Digital Channels, Remote Channels, Business Process Improvements

Preparing Your Financial Institution for COVID-19 Impacts

Posted by Larry Pruss on Mar 12, 2020 12:00:00 PM

Covid blog

Being prepared for any potential downside is something bank and credit union executives take quite seriously and, since the early 2000s, have been required by regulators to maintain a pandemic crisis plan. Now all of these plans are being put to the test, especially after the announcement by the WHO that the coronavirus is officially a pandemic.

Even as the business world improves at predicting and defending against risks, Black Swans will always be a possibility. As is characterized by such an event, it’s easy in hindsight to say, “We should have seen this coming,” but the fact remains that we don’t know what we don’t know; e.g., the impacts on the stock market and disruptions to daily life brought on by COVID-19.

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Topics: Digital Banking, Cash, COVID-19, Card Not Present, Coronavirus, Contactless

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