The third timeline is our darkest — although maybe not the worst-case — timeline of our possible coronavirus future. If we fail to meet this challenge, here’s how our experts see the future unfolding.
There are dramatic regional disparities in the effects of COVID-19. Small banks in the affected areas will either fail or will contract their future lending, which will further increase the disparity of the economic hit. Widespread defaults instead of loan modification will lead to a redistribution from those who are quite highly leveraged (and so vulnerable to asset declines/ low cash flows) to those who have resources (strong balance sheets); this will further increase inequality.
Christine Parlour
Sylvan C. Coleman Chair of Finance and Accounting at University of California-Berkeley’s Haas School of Business
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The COVID-19 pandemic has shined a spotlight on the large and persistent inequities that continue to divide society. The path to recovery can either reinforce or reduce them. So far, we’re on track to widen the chasm. More than 8 million people lack a bank account, meaning the people most in need of federal aid money will have to wait the longest to receive it because the government has to send them a check. Lack of bank relationships is also one of the reasons why minority-owned businesses have been unable to access federal loans, which will only serve to increase the existing wealth gap between the haves and have-nots.
Jennifer Tescher
President and CEO, Financial Health Network
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Although digital payments dominate, overall usage and spend are decreased due to the ongoing depression. Most in-store purchases are using contactless payments, with cards and cash being used less. Small businesses are strained due to the fees charged for digital payments versus cash and protest for lower fees like larger businesses pay. Many consumers aren’t spending as much as pre-COVID-19 causing the innovation in the space to slow despite higher adoption numbers. Due to economic pressures, digital adoption never reaches ubiquity as many small businesses cannot afford the fees and technology.
Tim Spenny
Senior vice president, senior client officer at Ipsos
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The need to visit a bank branch decreases significantly. Additionally, without knowing how widespread the coronavirus is along with the lurking threat of civil unrest at any moment, most choose to go out only if necessary. With the economy open, people are able to find jobs again and are beginning to slowly financially recover. Demand to speak with a live representative therefore dramatically subsides as customers’ economic situations improve. Most customers are again able to bank through digital channels. Concurrently, banks also upgrad their bandwidth, staffing, and training to deliver customized advice and handle sales over popularized video conferencing platforms such as Zoom. Banks have also invested in expanding Zelle to not only be a peer-to-peer payment system but also accepted at merchants. Additionally, they also enable Zelle to be used without a bank account and allow interoperability with Square’s Cash app to accommodate the unbanked population. With the diminished need for physical visits to a branch or ATM, financial services companies will close down much of their network and only leave “flagship” branches open for consumer confidence purposes. Operating and maintenance costs of the branch network are reinvested in digital channels, staff training and technology upgrades to meet evolved consumer needs.
Kevin Hung
Vice president, client officer at Ipsos
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There will be growing resentment to the established financial system as big companies continue to make some earnings on government programs meant to bolster the economy, while consumers increasingly struggle. Government programs run out of steam. There will be an increasing fragmentation of consumers – extreme nationalism, country boundaries turn into state boundaries turn into county boundaries turn into city boundaries, etc. Hyper-specialism within these increasingly narrowed consumer groups will be the critical to maintain viable financial businesses.
Jason Brown
President, chief client officer at Ipsos
Matt Carmichael, Editor, What the Future | 
@mcarmichael