As the novel coronavirus continues to spread, rattling the economy, banks are reevaluating their business propositions to clients.  

WaFd, formerly Washington Federal Bank, is offering interest-free lines of credit of up to $200,000 to small businesses as a result of the pandemic. The Seattle-based bank said the small business loans are meant to help struggling businesses that have been affected by coronavirus, which has caused many consumers to avoid going out in public. Coronavirus has hit the state of Washington particularly hard, with 457 confirmed cases according to The Seattle Times.  

“Businesses are already struggling as our neighbors limit shopping and eating at restaurants, to follow public health orders to avoid large crowds,” said Brent Beardall, president and CEO of WaFd, in a statement. “We want to offer these impacted business owners a lifeline to help them make it through this crisis.” 

Having announced the initiative yesterday, the bank is already processing more than two dozen applications, according to a company spokesperson.  

In other areas of the country, banks are taking measures to keep the spread of the pandemic to a minimum while trying to assuage customers’ concerns. In a message to customers last week, First National Bank of Omaha said the bank is deep cleaning all “high-touch” areas at its branches.  

“This level of cleaning follows the recommendations of the CDC and government health agencies and is being done in addition to our normal daily cleaning and sanitizing procedures,” the bank said. “We are also making sure our employees have the information they need to stay healthy or remain at home if they aren’t feeling well.” 

The bank also encouraged customers to bank remotely through digital channels, but said the bank remains open for business with guidance from various health agencies.  

See also: Investors: Coronavirus could shrink startup valuations  

With the economy poised for a potential sustained downturn, some banks might need to rethink their internal innovation efforts. At issue will be whether banks will have to divert money and other resources away from internal innovation as they focus more heavily on critical functions like credit-loss mitigation. 

Financial institutions that spoke with Bank Innovation, however, said they aren’t panicking just yet. When asked about a potential shift away from internal innovation, Jeremy Balkin, head of innovation at HSBC Bank USA, said, “Our team has never been more busy than we are right now.” 

CIT Bank, meanwhile, stressed that it had prepared in advance for this type of situations. 

“CIT has already invested in innovative solutions that make it possible for us to manage the vast majority of our business functions remotely,” a spokesperson said. “As a result, our technology development capabilities, some of which are focused on innovation projects, are continuing.”  

Other banks will wrestle with whether certain business lines are worth pursuing during a downturn. Radius Bank, which is set to be acquired by LendingClub in a move announced last month, offers banking-as-a-service for many fintechs, including NorthOne, Stackin’ and MaxMyInterest. According to Radius president and CEO Mike Butler, the bank isn’t planning to move away from this business to focus solely on retail functions.  

“We work within an agile framework and have kept, and plan to keep, all of our banking-as-a-service and technology projects running business as usual during this time period,” Butler said. 

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