How banks can use technology to improve operational resilience in uncertain times

If the events of the last month have taught banks anything, it is that they need to be prepared for every eventuality. The speed at which the global economic situation has changed since the beginning of the year has been unprecedented, as has the need to adapt to this new world.

Now, the immediate focus for banks (as with all organisations) is the health and wellbeing of their employees and then the support of their customers. As Shayne Elliot, CEO of ANZ bank in Australia, commented recently, banks are used to dealing with crises, but this is different. For financial organisations, operational resilience and business continuity in terms of enabling remote working and cashflow support for retail and business customers will be top of mind. But what are the other challenges they are facing?

For the new remote workforce, staff need to be equipped not only with the right hardware and software to enable collaborative working, they also need the right tools to grapple with customer challenges that have never been seen before. Banks will need to provide instructions to their employees for how to deal with these new scenarios. The mortgage freeze recently announced by the Chancellor is a good example of this. With some customers finding themselves in a financial emergency, these instructions not only have to be made at rapid speed, but with the empathy consumers deserve in these troubling times.

This leads on to the need for banks to be flexible in terms of their cashflow and lending. In addition to assistance on mortgage payments, huge loans for businesses are being rolled out by the government to help businesses and families hit hard by the coronavirus pandemic. If banks can offer flexibility in these processes now, it could help save individuals and businesses in the long run.

In unfortunate cases where a customer defaults, whether that be on a card payment, overdraft, mortgage or small business loan, banks must think of empathetic ways to deal with changing circumstances as more individuals lose their jobs. It will also require more of a case-by-case assessment of each individual, so a more detailed understanding of their unique circumstances can be evaluated. This is why exception-based handling will become the new normal, at least for the next few months, and continue to be at very high levels during a recovery period. With a greater need for improved forecasting and dealing with new customer scenarios, automation will in many cases be able to pick up the strain, with new policies being able to be created by staff to cope with demand.

Fraud could also become an increasing issue. Police have reported a growing trend of coronavirus-related scams with the number of such cases growing by 400 per cent within the space of a month. Even before this pandemic, losses from bank transfer fraud soared to £456m last year so banks were already on the back foot. Therefore, to keep their customers safe, banks must invest in anti-fraud technologies and processes to keep their customers and themselves secure from further unnecessary loss.  

What the above scenarios all demonstrate is the importance for banks of using all the operational levers at their disposal. Being able to prioritise and continuously flex workflows against certain customers, industries, and locations will help the most. Reallocating work across different, newly set up teams to help clients work through applications for government supported lending and grants will be of vital importance. In a world of increasing confusion and uncertainty, banks benefit from having the capability to proactively send out clear communications automatically to customers to keep them informed of progress and actions required. This will help to keep customers calm and assured that disruption to their finances will be kept to a minimum.

This situation has shone a light on the fundamental need for an acceleration towards digital banking. Customers are being forced to bank online as they cannot leave the house, and banks a ramping up their internal automation so that customers facing staff can deal with the sudden influx of customer queries – the majority of which will be the type of cases they have never dealt with at this scale before. Changes are being implemented to affordability matrices, communication methods, escalation processes, industry and customer segment specific policies. Most important of all is the need for speed and effectiveness. Banks don’t have time to make changes in a few months’ time – the operational resilience and future livelihoods of their customers is relying on banks to act fast now.