Pandemic-Era Deposit Operations

April 21, 2020  |  Jan Trifts

By:  Jan Trifts and Marcy Scanlin, Strategic Advisors

As the COVID-19 pandemic unfolds, financial institutions are forced to shift priorities and protocols quickly as they protect the physical and financial health of their employees, customers and members.

While this disruption is starkly different from the economic conditions that caused the Great Recession in 2008 and 2009, this current crisis is reverberating throughout the economy as people face unemployment and families struggle to pay loans and manage cash flow. Although we see the immediate needs to address the lending side, there is, of course, another important part of the balance sheet that begs attention: how to manage the deposit portfolio, specifically deposit operations.

With this pandemic hitting the financial system so suddenly, it has landed one-two punches on both ends of the age and income spectrums. Many people who were already living paycheck-to-paycheck are facing layoffs or uncertainty in job security. People planning to retire are seeing that horizon stretched as their portfolios shrink. Retirees are worried about the security of their nest eggs as they struggle with experiencing yet another financial downturn in their lifetime.

Take the baby boomer generation for example – according to Raddon research, even before the pandemic, only 26 percent of baby boomers who hadn’t retired felt very or extremely prepared for retirement, so the need to ensure their financial security has become paramount.


Generational trends aside, many financial institution accountholders are anxious about their futures, and as we’ve seen in tasks as basic as grocery shopping, that anxiety can spur decisions they might not make otherwise. The spike in demand for cash we’ve experienced over the past several weeks is one example. Withdrawals are up, reflecting the same stockpile mentality that has taxed grocery stores and paper product manufacturers.

Allay Their Fears

Never has it been more important to communicate directly and consistently with your accountholders. Remind them that the pandemic is unlike a hurricane, tornado or other natural disaster and is not disrupting banking or payment systems. Stress the fact that financial institutions are well capitalized now compared to the last financial crisis, and reassure them that their accounts are safe, sound and secure. Reinforce that their deposits are federally insured by the FDIC or NCUA. 

Point out that while lobby hours may be curtailed, accountholders still have 24-hour access to their accounts online and through your call center. By the way, this may be a good time to consider increasing hours and staffing in your call center while cross-training employees to handle multiple needs.

While many senior depositors have smartphones, those who do have them and have not adopted mobile banking express security issues as their primary concern. Continuing to educate them about the security of banking via smartphone can help allay their fears.


Remind customers and members that credit and debit cards are likely to be safer to use than cash. A plastic card can be sanitized easily with disinfecting spray while paper money is difficult to clean. Even better, they’re especially useful as more consumers move to online shopping and restaurant take-out orders.

Contactless payments are desirable at the grocery store or pharmacy, in particular. This is a good time to reach out to customers and members who have not downloaded your mobile app or have no activity on the app to help them download it and move it the top of their mobile wallet.

For accountholders still wanting to hold on to some currency, invite them to withdraw a modest amount of cash and hold it as a safety net while day-to-day transactions are met with their credit and debit cards. And, do make sure your ATMs have plenty of cash. The combination of closed lobbies and increased demand may strain ATM balances and empty ATMs, encouraging the behavior and panic that we are trying to prevent.

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