How Economic Impact of COVID-19 is Pushing Banks to Digitize

As COVID-19 impacts the global economy and infiltrates every business across every industry, financial services companies present some of the most unique challenges. The banking industry must now adapt to a remote employee and consumer base, pushing the role of ‘banker’ into a purely digital experience. This extreme experience has given several insights on how consumers interact with banks, and what banks need to be doing in order to help customers during this time of remote living.

The biggest issue is that people will not have access to financial service branches. Banks should begin to operate under the assumption that there will be no branches open, and customers may be sequestered for an extended period of time — a wakeup call for why banks need to be digitally enabled.

There are a few key things that banks must act upon:

Banks need to digitalize quickly

According to the Digital Banking report, only 17% of banks have been successful in deploying digital transformation at scale. Only 43% have a clear digital strategy and vision with a well-defined road map for digitization. This is proof that banks are not ready for a massive shift to digital. Until this point there has been no real urgency from banks to make this shift: with over 50% of consumers still visiting branches, many banks have been focused on the optics of customer experience, such as front-end web design, rather than building the infrastructure to support true transformation.

While the closure of physical bank locations has negative ramifications on the industry and the marketplace as a whole, it’s also an opportunity for banks to show their breadth of digital banking options because we know banking services are not set up to operate remotely. The banks that have already made that leap will have an advantage over their competitors while people clamber to get their payments made. Apple Pay, Venmo, Square, and Zelle are all examples of companies that have a competitive advantage because they already have digitally enabled payment functions.

Banks need to bolster customer’s access to critical tools

There is a need for better online interactive literacy tools that will help customers easily figure out how they can access things like credit, insurance, and portfolio management. Customers need personalized messages, not bot-generated emails that are set to blast out to everyone. The bank should be highlighting what is available digitally: payment, mobile deposits, credit lines, and loans. This digital shift will not be a trend, there will be a significant workforce change that will evolve remote work to become permanent, which will, in turn, have a positive impact on the environment and traffic patterns.

A step beyond that would be looking at how banking networks can help facilitate payments for medications at places like CVS, Walgreens, and Target, as well as, food delivery from Amazon Prime and Walmart. SMS Technology will need to be used to help facilitate these types of payments.

Financial tools will be imperative in easing the burden during this time. Customers not only have to continue paying bills and conducting their regular banking; they may also be more mindful of taking advantage of lower mortgage rates, refinancing, and more — and they’ll have to do it all via mobile or desktop. With customers being isolated, banks need to shift further to emphasize their digital options and utilize social media and omni-channel outlets to pro-actively engage with clients. It is the perfect time to capitalize on a captive audience.

Banks need to reassure their customers

Banks need to take the lead in re-assuring the customer base and asking how they can help in an empathic and personalized way. Banks should look to have a voice from their C-suites, every day, talking about what is happening. Connecting with consumers by answering questions, giving tips around navigating travel insurance, how to send money to family and friends that are isolated or may be struggling financially, sharing news around what the bank is doing to stabilize, educating people on being aware of fraud and hackers capitalizing on this unprecedented time. Help the customers add value to their lives during this time of uncertainty, offering options that make them feel more secure. The banks that provide that ability and make it as simple as possible will win.

How Economic Impact of COVID-19 is Pushing Banks to Digitize

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