THE BANKING SYSTEM'S DEVELOPMENT TRENDS DURING AND AFTER THE COVID-19 PANDEMIC
Keywords:banking, pandemic, COVID-19, trends
In recent years, since 2019, the major economic and financial shocks in banking systems and in general in countries have been caused by the COVID-19 pandemic. Current realities show how a high level of resilience throughout the financial cycle is important for financial institutions to maintain even when unforeseen events occur. This study analyses the banking sector's development in the period from 2006 to 2021. It shows how COVID-19 has affected the dynamics and structure of the banking system in the mentioned period.
In the research results, we identify five main trends that accelerated due to the pandemic, namely: 1) the new channels of banking products and services distribution; 2) the digital transformation development; 3) the new working ways become the norm in the banking sector; 4) new models of the risk management and strategy development, as well as related processes; 5) customers, stakeholders, investors, and employees evaluate banks institutions by values and goals, not only financial especially during a pandemic.
As a result of the pandemic, the changes, which should take place in the banking system in the next 5 years according to the development strategy, are actually already happening. How affected such acceleration on banks and is the banking system ready for the challenges? After all, to adapt the banking system to change, it needs to develop digital infrastructure and implement innovations to keep up with the evolution of business processes. Paradoxically, the changes caused by the COVID-19 pandemic have opened up new opportunities in many of the areas discussed in the article.