Citation: Darwish, N.A.; Bayyoud, M. Impact of COVID-19 on UK Banks; How Banks Reshape Consumer Banking Behaviour during Pandemic. COVID 2023, 3, 131–143. https://doi.org/10.3390/covid3020008 Academic Editor: Martin Thomas Falk Received: 11 October 2022 Revised: 16 January 2023 Accepted: 20 January 2023 Published: 24 January 2023 Copyright: © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). Article Impact of COVID-19 on UK Banks; How Banks Reshape Consumer Banking Behaviour during Pandemic Nidal A. Darwish 1, * and Mohammed Bayyoud 2 1 Department of Business Administration, Faculty of Business and Economics, Al-Quds University, Jerusalem P.O. Box 20002, Palestine 2 Department of Finance and Banking, Faculty of Business and Economics, Al-Quds University, Jerusalem P.O. Box 20002, Palestine * Correspondence: ndarwish@staff.alquds.edu Abstract: Due to COVID-19 and prolonged lockdown, banks in the UK have reported impact on their operational activities and financial aspects. To deal with the impact of the COVID-19 pandemic, banks have adopted different strategies that reshape consumer banking behaviour during the COVID- 19 pandemic. This study evaluates the impact of COVID-19 on three banks in the UK, including HSBC, Royal Bank of Scotland, and Barclays Bank. A mixed research approach was adopted where a closed-ended survey with 30 employees (10 employees from each bank) were chosen to participate in the survey. Interviews are conducted with three managers of the banks. The study findings show that banks adopted social distancing to ensure that their brand operations were not affected. The banks did not consider shutting down the branches for cutting the cost. However, there has been a shift from a manual to a digital process for client queries to improve efficiency. The banks also created the brand image of operating during the pandemic. Keywords: COVID-19; banking sector; consumer behaviour; financial impact; brand operations 1. Introduction COVID-19 has created critical instability and high volatility in global capital markets. The financial sector is one of the most affected sectors where the pandemic has caused bank valuations to drop in most countries [1]. However, the full impact of the pandemic on the banking sector is yet to be determined, and it is assumed that the negative impact of the pandemic will last a little longer. It is reported that the valuation and profitability of banks are the areas that are very much impacted. Due to a decline in the economic activity, where banks have experienced a significant drop in their valuation and profitability, they have also faced issues in continuing their operations. In this regard, it is found that banks have been struggling with continuing their businesses when there is a significant decline in economic activity and prolonged lockdown [2]. In the UK, the banking sector has also experienced similar issues that have slowed down business activities and changed the way banks previously operated. Due to a decline in economic fallout, banks in the UK struggled while managing the leading priorities that require decisive steps to relocate and recalibrate for the future. In this regard, banks, particularly in the UK, have been working to keep their distribution channels open, abiding by the social distancing guidelines and supervisory and compliance functions that were not meant for remote work. Banks are also endeavoring to manage revenue while meeting customer expectations [3]. Banks made other significant changes to ensure that the lockdown has the minimum effect on business continuity. In this respect, different UK banks have adopted strategies that are likely to reshape consumer behaviour in the banking sector [4]. It includes changes in working and visiting hours such as an adjustment in hours, visiting allowed only with an appointment, automatic routine task, automate the back-office, shifting employees from non-critical to essential tasks and temporarily stopping some portfolio products, relaxation COVID 2023, 3, 131–143. https://doi.org/10.3390/covid3020008 https://www.mdpi.com/journal/covid