Belarusian Economic Research and Outreach Center

New challenges and features of the financial sector functioning in the conditions of pandemic

The policy paper considers the recommendations of the International Monetary Fund and analyses the measures that central banks take to support and enhance the quality of financial institutions work with economic entities, including customers, that are most affected by the coronavirus pandemic. The author concludes that the level of financial sector digitalization and retail restructuring to non-contact operating principles influence on the quality and success of these sectors. Taking into account that the significant part of payment transactions in retail is related to the purchasing of goods and services, the recommendations on reforming the principles of retail and the digitization of financial sector are considered as interrelated measures to improve (not deterioration) the quality of life in the conditions of social distance. As Asian countries were the first who affected the impact of the coronavirus epidemic, the study provides examples of Asian banks responding to the challenges facing national economies in pandemic conditions. A brief analysis of the importance of Fintech market developing in a difficult epidemiological situation is also provided. Based on the analysis, the final part of the study describes recommendations of the national financial system development in new economic conditions.

The Policy Paper is available only in Russian.