2020 so far has most certainly been different and unexpected. The COVID-19 pandemic has turned over nearly every aspect of life, from the personal (how people live and work) to the professional (how companies interact with their customers, how customers choose and purchase products and services, how supply chains deliver them).
But a crisis can also generate a lot of energy and create a new normal. It can transform industries, companies, customers, and culture. One sector that seems to actively use that energy and push transformation is the banking industry.
ConMendo has gathered a selection of effects the pandemic had on Banks. We reached our observations through interviews with bankers from several banks, both in Germany as well as other European countries, as well as the results of our recent #ConMendo Covid 19 Survey.
90% of all respondents from the banking sector expect the COVID-19 crisis to only last short or medium term, but at the same time they believe that this crisis is going to fundamentally change the way they do business, with lasting impact on their customers’ needs.
The question to answer is: will banks manage to use the crisis to their advantage and boost for positive change?
Banks working from home
Banking is an industry that builds on trust: customers need to trust banks to deposit their money and banks need to trust their clients to pay back their loans. To ensure this trust, banks are required to follow a large number of internal processes and procedures to minimize risk and maximize their business. Many bankers believe that those processes often prevented fast and dynamic decisions and therefore slowed down innovation and change.
Corona has now put some of those processes and procedures into question. While keeping up the high standards, 80% of all respondents of the #ConMendo Covid 19 Survey believe, that those processes and internal structures need review.
During the crisis, processes got quickly adapted to work in a virtual world without presential meetings. While banking has not lowered its standards, it became slightly more flexible regarding the format of those rules. Corona showed that processes can remain – with small adaptations – under different circumstances.
Departments, such as the trading floor, which have heavy compliance rules and where it was previously unthinkable that employees would work from home, have now managed to enable their employee’s safety, while at the same time continuing to provide their services to the same level and with compliance standards.
Banks will very likely have to revise their processes and presumptions after the crisis and rethink their way of working. Large, costly offices may not be needed in the future and could get replaced by smaller and more agile workspaces.
Banks role as supporter
The pandemic had a wider reach than internal processes for the banking sector. The crisis has given banks the opportunity to shift their often-considered negative image into the image of supporters. Banks are playing a fundamental role in providing government funds to business which have been affected by the crisis. They have been working hard to support the economy.
This can also help banks to shift their image and build on the trust they created during the pandemic. Particularly during the times of the crisis, people realized who they can trust and who they want to work with in the future. Over 70% of respondents of the #ConMendo Covid 19 Survey believe that the crisis has revealed who to trust and actively chose their business partners based on trust and collaboration during the crisis going forward.
Now is the time to create trust for the industry and show their customers that they are there for them along every step of their way.
Changing customer needs
Hygiene standards and social distancing during the pandemic have forced even the most technology adverse people to start using Apps or wireless payment options.
The speed that modern technology has developed has caused financial institutions having to invest billions to remain relevant to customers and competitive in the marketplace. Technology is changing everything – its use enables banks to become more potent enablers of increased service with reduced cost; innovation is imperative.
The crisis has now showed banks, that they can move fast and adapt their products and services to the changed customer needs. There has been a massive shift regarding the use of digital products. As some Banks share during interviews, the use of their digital services has increased by 90% since the beginning of Corona.
Banks also say that digitalization has now become a must. Nearly 90% of respondents of the #ConMendo Covid 19 Survey believe that digitalization will become even more important going forward and 86% of all bankers responded that the crisis showed them that they can move fast if they must.
Banks have shown during the crisis that they are able to adapt fast and provide technology when needed whilst still granting compliance with regulation and transparent processes for customers.
It is important for them to keep the positive momentum and keep working to improve their technology to modernize banking and adjusting to their customer needs.
What’s after Corona
The ongoing global pandemic is causing a deep reflection about the future and how to adapt and / or change it. In the last months, major changes have already taken place, with nearly 30% of the global workforce working from home, limited use of public transportation and a massive decrease of traffic in major cities. Future city-planning will be hugely impacted by those developments, with a need for less density and a decrease in demand of office space.
The latter will also impact banks, as they may use the opportunity to reconsider their property utilization, encourage flexible working of their staff and enable customers to do their banking virtually by extending digital channels.
Banks have managed to adapt fast and support the economy with their services and support – It is now important, that they keep the momentum after the crisis and keep working on the positive change.
It is time to further review their property utilization strategy, work on digitalization and transform the way we do banking. It is time to boost digitalization, support the cultural change and boost innovation to uncover new sources of income.
Please contact us and benefit from our vast experience.
Photo by Neil Thomas on Unsplash