Publication

On June 2 and 8, Bank Governance Leadership Network (BGLN) participants joined two virtual meetings to continue discussions around the COVID-19 pandemic and implications for large bank operations, technology, and credit, conduct, and reputational risks. The key themes that emerged include:

• As digital transformation has accelerated, new risks have emerged
  The COVID-19 crisis has forced banks and their customers to use digital tools and processes to compensate for branch, office, and call center closures. Participants discussed moving more quickly to the cloud and expanding the use of AI, the acceleration of internal processes, and the related cyber and operational risks they have accepted in the short term, and what may persist over the longer term.

• Persistent uncertainty continues to challenge forecasting
  The unprecedented steps taken to control the pandemic, the delayed effects on some sectors, and the continuing uncertainty about global economic recovery forecasts compound the challenge for banks trying to model the impact on their customers and portfolios.

• Banking models and reputations will be tested
  Participants discussed the risks for banks as government programs to support individuals and companies through the COVID-19 pandemic expire and the financial impact of the pandemic and economic shutdowns catch up with more customers.