The Taiwan Banker

The dawn of the post-pandemic era has arrived. One after another, Western nations have opened up, and Japan and South Korea have also eased entry restrictions. Meanwhile, the pandemic in Taiwan is now entering its twilight. Taiwan has learned a lot about epidemic control after nearly three years of hands-on experience. With a gradual return to normalcy, the industries that have suffered the most may rebound the most, including tourism, health care, and F&B. The financial industry should use digital technology to accelerate the recovery of long-suffering industries in Taiwan. Comprehensive vaccine coverage In the first year of the pandemic, Taiwan corralled the coronavirus with proactive measures such as some of the world’s tightest border controls and thorough contact tracing. However, in 2021, the more infectious Delta and Omicron variants broke through Taiwan’s defenses, highlighting the need for comprehensive vaccination. At that time, foreign experts warned that since SARS-CoV-2 was heading down the path of endemicity, countries could not return to normal and “reopen” fully and still maintain an elimination or “zero-Covid” strategy. Instead, it was necessary to learn how to “coexist” with the virus. Many Western countries have chosen to “live with Covid,” of which a key part is vaccinating a high percentage of the population. Vaccines offer limited protection from infection – at least so far – but are very effective at preventing severe illness and death. As a result of rising vaccination rates and natural immunity gained from previous infection, the pandemic has been gradually slowing in many countries. The two-dose coverage rate of the US is about 66%, and about 33% have taken the booster. About 84 million people in the US have been infected. By mid-May, the daily case rate dropped to 100,000. In the UK, the two-dose coverage rate is about 73%, and the booster rate is 58%. In Taiwan, meanwhile, the two-dose coverage rate is 78%, and booster rate is also above 60%. As of May 13, 2022, the global infected population was 509 million, and the death toll was about 6.26 million. On January 25, 2022, the daily caseload peaked at about 3.65 million, but after that the curve showed a significant increase, declining to about 690,000 on May 11. Internationally, only China and North Korea have continued to choose costly “zero-COVID” policies. During lockdowns, factories cannot operate smoothly, and the economy is bound to be hit. According to a survey released by AmCham China, 58% of surveyed US-funded companies in China have lowered their revenue forecasts for 2022, and more than half (52%) said that their investment plans have been delayed or reduced. “Revenue forecasts for the year are down…members don’t see any light at the end of the tunnel,” said Colm Rafferty, Chairman of AmCham China. Many companies will evaluate other countries as alternatives to China. Taiwan hopes to follow in the footsteps of most other countries and expand its international exchanges, and therefore has relaxed its restrictions. As a result, since May, the number of infections has been increasing, with tens of thousands of confirmed cases every day, and more than 1.47 million since the outbreak (data as of May 26). Nevertheless, the majority of cases are mild or moderate; only about 0.06% are severe. It seems that the high vaccine coverage rate has strengthened protection. The government has also provided a lot of assistance during the restrictions. More than 23.43 million people received “quintuple vouchers.” October last year ended five consecutive months of negative growth in turnover in F&B, and October to December, as well as February and March this year, all hit new highs in YoY growth. The government has paid close attention to market changes caused by the pandemic and responded accordingly. New lifestyle industries will usher in a new recovery After the outbreak peaks in Europe and the UK, many countries gradually relaxed their quarantine measures. The US relaxed restrictions on entry of vaccinated people at the end of last year, and it lifted its mask mandate in February this year to speed up the recovery. Business has gradually returned to normal. According to the Treasury Department, government unemployment benefits have fallen sharply, while taxes from individuals and households have increased. The British Office in Taiwan also stated that the UK would be one of the first major economies to lift all COVID-19 international travel restrictions after March, marking a new milestone for the international tourism and aviation industry. Korea officially lifted its outdoor mask mandate on May 2, and Japan later followed suit. On May 11, the Chief Cabinet Secretary of Japan announced that if a proper distance is maintained outdoors, it is unnecessary to wear a mask. Japan has gradually loosened border controls, and is considering allowing boosted tourists to enter in small groups in May, and to increase the number of daily arrivals from 10,000 to 20,000 in June. In the US, firms are rediscovering the value of human interaction. Data from four business travel agencies show that business class is full again two years after COVID-19 pushed the airline industry to the brink. “Business travelers are coming back,” said Andrew Crawley, Chief Commercial Officer of American Express Global Business Travel. According to data from the AmEx GBT website, global business travel agency business was the worst at the peak of Omicron, but has now rebounded to 61% of its pre-pandemic level. The business travel management company CWT says bookings are now more than half of normal levels, up from just 20% at the start of the year. It said that senior executives in the technology, retail, and financial industries are all starting to move. Previously, they may have relied on Zoom or Teams meetings online, but are now flying much more frequently to attend meetings and conferences. FCM Travel, which operates travel business in nearly 100 countries, said that its recent growth rate has reached 80% of that in 2019, and some places have exceeded pre-pandemic levels. New models and business opportunities Now, as Taiwan begins its recovery, it will be very important to see whether the industries that have been harmed can bounce back from the epidemic. “The global lockdowns have transformed the tourism industry. In the end, it will undergo a new wave transformation and reform. Whether or not companies can respond to these changes and create exclusive blue oceans will determine whether or not they have a future,” said Arthur Wang, founder of Inno Hospitality Limited Hong Kong. In order to enable related industries to handle post-pandemic tourism, the Tourism Bureau of the Taiwan Ministry of Transportation and Communications has held seminars for the travel industry, and also discussed draft operating guidelines to handle outbound and inbound group passengers, and continued to communicate with the industry on implementation of post-pandemic practices for international tourism. Lin Peijun, Director of the Tourism Bureau, said that over the past two years, the pandemic has affected all industries and industries, but tourism especially. In line with the policies of the Executive Yuan, since 2020, the Ministry of Transportation and Communications has provided several subsidies to the travel industry for wages and living expenses, relief subsidies, loans and interest subsidies, and incentives for characteristic group tourism, etc. The government has also taken this opportunity to help the industry learn new knowledge to meet new opportunities. Guo Cheng-he, Chair of Riversoft Information, which is deeply involved in the tourism industry, said that the global trend towards online shopping has made the tourism industry more transparent, and that companies must start providing consumers with more high-quality and personalized immersive tourism experiences. “On-demand service will disrupt the traditional industry’s invoicing method of purchasing products first and then reselling them to tourists, turning the industry into a smart industry.” He said that this model will also be very suited for cooperation with the financial industry. The pandemic has also changed health management models. Zero contact, long-distance digital health management has become a new trend, and also an innovative way for the domestic insurance industry to attract policyholders. Insurers are breaking silos by combining technology with health. Taiwan Life Insurance is working with ASUS and Med Net to launch a health ecosystem. Nanshan Life Insurance also announced a “Family Treasure” cross-industry alliance with the technology giant Inventec and three health management centers, cooperated to launch a “smart remote health management service,” and has been deepening its health management service chain. According to World Health Organization (WHO) statistics, 75% of the world’s population has suboptimal health. During the pandemic, many people have avoided visiting high-risk areas such as hospitals, and may have neglected regular health checks. Yet since the pandemic began, everyone has been paying attention to health. If you can use health management equipment to measure health at home, you can save the time from appointment registration and outpatient waiting time, and reduce the risk of frequent visits to medical institutions. The healthier the insured, the healthier the insurance company is. The pandemic has become a major driver of financial digital transformation The pandemic has been the biggest recent driver of digital transformation, including in the financial industry. Over the past 2 ½ years, many consumers have become proficient in use of digital financial services. With that in mind, the financial services industry must continue to accelerate digital transformation and 720-degree ubiquitous financial services. According to bank statistics, usage of online transfers increased by more than 50% during the pandemic period. 50-60-year-olds saw the largest increase, at 57%. With the advent of the post-pandemic era, demand for digital finance will no longer be limited to young people. “Zero-contact” financial services will become the norm. For banks, financial services have already moved from physical branches to mobile phones. In the past, customers actively sought financial services. In the future, financial institutions must think from the customer perspective and consider their peace of mind and health.