The COVID-19 pandemic has brought sharp declines in the financial services industry. Before this global outbreak, commercial banking was experiencing a steady period of growth and innovation. Banks and credit unions worldwide continue to prosper despite growing competition from alternate financial channels.
And yet, in just a few weeks, financial institutions all over the world are suddenly in the brink of horrific disruptions that could change banking forever. As global economy plunges into record-breaking lows, commercial banks are struggling to stay afloat and meet customer expectations.
Some organizations will significantly cut costs while others will invest in digital solutions to keep their distribution channels open. Either way, banks must see this crisis as an opportunity to reinvent themselves and connect better with their clients and stakeholders. They must use this time to explore new technologies to boost marketing, disaster-preparedness, and future growth.
Banking and social distancing
Social distancing can be challenging for establishments, including banks, that face heavy foot traffic on a daily basis. As a result, banks had to close smaller and less used branches temporarily, focusing on flagship branches instead. Alternating staffing days were also followed to prevent cross-contamination.
Some banks implemented an appointment-only rule for visits to control the number of customers per day. Minor concerns and succeeding visits will be turned over to virtual, call center, or digital channels instead.
In the coming years, consumers and bankers alike will fear all forms of infection. This will prompt banks to adopt health and hygiene plans for all employees. Physical examinations will be conducted on a more frequent basis and health requirements for potential employees will be stricter than ever. Standard procedures for routine cleaning and disinfecting will also be implemented.
Disaster-preparedness will also be practiced in internal operations. For more established banks, remote work could be an option. Management and senior bankers will have access to digital backups of crucial files and documents. Paperless data collection will prevent major disruptions in case of another emergency that can prompt key branches to close.
A cashless future
The COVID-19 pandemic will push most, if not all, financial institutions to adopt innovative and contactless methods.
Shifting to mobile banking will pave the way for a cashless society. It will welcome integrated payment portals and e-wallets designed for faster and simpler transactions.
Personal mobile devices will be the primary means to make financial transactions. Technology providers should explore stronger multi-factor authentication (MFA) methods through biometrics. Online accounts must be protected by powerful encryption methods to prevent cyber-attacks including data loss and identity theft.
In a few years’ time, banks will look back at COVID-19 as a trigger that enabled them to enhance their ability to prepare for disaster. More financial institutions will embrace artificial intelligence (AI), data-driven analytics, and real-time communication. As market forces and customer behaviors change, banks will have to build stronger and empathetic digital connections with their customers.
It is true that economic uncertainty pushes businesses to think outside the box. A global crisis like a pandemic will bring in new opportunities for self-assessment, growth, and better customer service.