Four ways to mitigate risks of COVID-19 cash hoarding

During times of crisis, a broad spectrum of motivations can drive the banking public to panic about cash access. The reasons people feel compelled to pull large sums of money from their trusted financial providers range from the downright silly to the painfully serious. Regardless of the logic, however, mass withdraws can have significant ramifications for financial institutions of all sizes.

Because the U.S. financial system has experienced incidents of cash hoarding several times throughout history, including the 2008 financial crisis, regulators are well aware of the risks. And, they are making moves in the midst of the COVID-19 pandemic to mitigate them.

Needless to say, credit unions still want to be proactive in the prevention of a mass cash withdrawal situation. Here are several moves of your own to consider:

Over-communicate messages of safety and soundness

Through as many channels as possible, share with members the many ways their cash is safer tucked in tight at your institution. Keeping large sums of cash “under the mattress,” so to speak is incredibly dangerous, particularly in a heightened state of uncertainty.

 

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