COVID-19: Impact on retail banking and why banks should move towards digitization

Banking and Financial institutions worldwide have been under a lot of pressure over the last few months, and are constantly looking for ways to evolve their business due to the changes in the regulatory and compliance norms, along with competition. The ongoing COVID-19 pandemic has made it difficult to maintain daily operations and control operational costs. While think tanks across banks have been working towards managing the current crisis, there needs to be focus on redefining business strategies to help prepare them for the future.

Since banks rely heavily on physical visits from customers, they need to change their entire way of business — maintain social distancing and execute safety precautions across all their branches and offices. This in turn can lead to challenges such as;

  • decline in revenue due to lower customer footfalls,

The growing consumer expectations has forced banks to adopt digital banking solutions and embrace new technology to ensure there is business continuity and growth as well. While the lending journey is a mix of physical and digital processes, there is a slow shift that will transform this process into an entirely digital based one.

In spite of these added pressures and challenges, the current situation provides significant opportunities for banks to transform themselves in areas such as adopting online banking solutions, digitalization, enhancing productivity, achieving agility, cost optimization, and becoming profitable.

One of the questions CFOs were asked in PwC’s COVID-19 CFO Pulse Survey “Which of the following financial actions is your company considering, as a result of COVID-19?”

What are the three key areas that banks should focus on to be future ready?

  1. Re-engineering the business continuity process — The first step would be to adapt to the new normal, and all the changes required. The banks will have to adopt and deploy new and advanced technology, and implement new standard operating procedures (SOPs) for both internal operations and customer-facing activities. Subsequently it is about offering customers a seamless service across various touch points, branches, ATMs, kiosks, digital assets and support centers.

A few initiatives that banks can focus on their digitization journey:

  1. Leverage artificial intelligence (AI) and machine learning capabilities, including natural language processing across customer touchpoints.

How fast can banks adapt?
It is all about the speed of change, of adapting to changes and embracing the needs of the new normal. The customer’s preferences grow and with access to several digital channels, they demand information at the touch of a button. Banks should ensure real time engagement and with the risk and compliance teams to ensure order is maintained.

Source: Deloitte

Open source banking Application with advanced analytics and AI can help provide real- time updates and personalization to the customers. Fintechs can help achieve this in a short span of time.

The future is definitely moving towards a digital powered economy. It is now time for the banks and other financial institutions to evaluate their current capabilities and reassess the shift required. Technology, data, and decision making tools need to be redefined to accelerate growth and edge over competition. At Neutrinos, we offer customer-focused digital banking solutions to forge stronger relationships. To understand how you can achieve digital transformation in the banking sector, reach out to us now.

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http://goneutrinos.com

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