Bank of America’s head of financial institutions, Paul Taylor, believes that rather than diminishing the role of cash, the Coronavirus pandemic has actually heightened its appeal as a secure asset. In his interview with Finextra TV, he emphasized the dual nature of cash: it serves as both a payment method and a tangible store of value.
According to Taylor, there has been a notable surge in demand for banknotes globally, driven by clients seeking access to cash. “We have a robust global wholesale banknotes business, and banks worldwide are reporting increases in demand as their clients desire cash,” he stated. He highlighted that cash is increasingly viewed as a safe haven by the public.
Conversely, Taylor noted that the pandemic has accelerated the shift towards digital payment methods. With a surge in contactless transactions and online shopping, he anticipates that these behaviors may become entrenched. “The crisis may lead to long-term changes in consumer behavior, with people recognizing the viability of digital wallets and other electronic payment options, which also offer the advantage of being non-physical,” he remarked.
When discussing the impact of the Covid-19 crisis on sustainable finance, Taylor expressed that while Environmental, Social, and Governance (ESG) initiatives may not be a higher priority for financial institutions, the understanding and application of ESG principles are evolving. He views ESG as transitioning from a theoretical concept to a practical necessity.
“For banks, this manifests in various ways,” he explained, particularly in their support for government programs that aim to facilitate financing for consumers and small businesses. “This may not be the ESG we’re traditionally familiar with, but it is deeply societal and significantly pertinent.”