Pub. 12 2021 Issue 3

wvbankers.org 24 West Virginia Banker Three Issues – and Opportunities – Facing Banks in the Post-Pandemic World By Nicholas P. Mooney II, Spilman Thomas & Battle PLLC A s the world (hopefully) comes out of the COVID-19 pandemic later this year, the way we conduct business is changing. The banking industry, described by one commentator as “the most old-school of the old-school professions,” is criticized as resistant to change. As one article described it, “the fundamental ways that financial institutions function has not changed with the times.” These observations do not consider the changes happening in the banking industry for years and those accelerated by the pandemic. Several of those changes present both hurdles and opportunities. The banks embracing these opportunities may be the long-term winners. Below, we highlight three opportunities in the banking industry: 1. Sustainable Banking/ Environmental, Social, and Governance (ESG) Sustainable banking or “banking with a purpose” refers to banking in a way that considers the economic, social, and environmental effects of the bank’s products and services. Sometimes called Environmental, Social, and Governance (ESG), this type of banking is becoming a requirement for financial institutions as customers become interested in doing business with companies – including banks – that “do good.” This issue is politically charged, and we leave that debate to its proper time and place. Regardless of one’s politics, there’s no denying that sustainable banking is a hot issue banks are facing. Although U.S. banks have been criticized as slow to adopt sustainable banking compared to their European counterparts, they are now stepping into this realm in a big way. JPMorgan Chase’s commercial banking arm has created a “Green Economy” team that provides companies producing environmentally friendly goods and services. Wells Fargo has been entering into multiple agreements to purchase renewable energy from producers in many states. Bank of America has developed an Environmental Business Initiative to deploy $1 trillion by 2030 to aid in the transition to a low-carbon, sustainable economy. Fifth Third has joined the Partnership for Carbon Accounting Financials, a worldwide group that addresses standards for financial institutions to assess and disclose greenhouse gas emissions associated with their products.