Banking reimagined - How to prepare for the period after COVID-19?

The global banking system had been witnessing a positive streak for the past few years with stable ratings across most countries. It was progressing towards and preparing itself for the next wave of disruption with blockchain and AI-backed technologies as its epicenter.

However, in January, the world was hit by COVID-19, a pandemic no one ever saw coming, let alone being equipped to mitigate it. The crisis resulting from a total lockdown scenario changed the face of businesses and everything else around the world, including the banking industry. It threw the banking sector into the spotlight, coaxing it to accelerate digitization overnight.

The pandemic, undoubtedly, has become the turning point for the banking sector as well as its workforce and its customers. The ones who have been resistant to going the digital way have been compelled to adopt and embrace digital banking at full throttle.

The shining moment of this transformation has been the observation that more people are realizing the convenience of digital banking and are now reconsidering their bank branch visits altogether. Some of the banks and financial organizations have come to daunting realization about their archaic processes and the urgency of developing meaningful digital banking experiences, while the others are contemplating to decrease their branch budgets and networks and reinvest in digital channels.

The digital transformation of banks

World Economic Forum in its recent report hinted on the dire state of the world economy; indicating that the containment measures are having an inversely proportional effect on the economies where the ‘economists cannot even begin to predict the end of the recession that is now underway.’

The banks have been playing and will continue to play the lead role in the recovery of the global economy. Some important points to keep in mind are:

• Worldwide, the banks have been operating with limited staff and have tirelessly worked towards making work-from-home possible to ensure the continuation of seamless financial transactions, showing that they too are the front-line heroes who are determined to fight against the virus with all their grit.
• The authoritative banking regulatory bodies in most countries streamlined the measures regarding easing-out debt obligations and extending leniencies, such as moratoriums on funded facility repayment.
• Globally, the banking sector proactively addressed the need for better and more secure digital banking solutions to help their customers to carry out essential financial transactions without risks.

In short, the focus of banks around the world during the pandemic-led lockdown has been to offer essential services and extend support solutions with optimum attention to quality, customer experience, security, and risk control, with the safety of their workforce and customers as their priority.

After withstanding these times of crisis, the banks have also realized that it cannot dwell more on the subject and will have to rapidly start creating a smarter digital banking framework if they want to sustain themselves in the immediate and long-term future.

Considerations for the digital journey ahead

As the digital transformation of the banks takes the center stage, they need to gain deep insights into its multiple variables. The aftermath of COVID-19 will present completely transformed customers and customer demands. Robust, secure, and fast digital banking solutions will be the key drivers of customer experiences. 

To retain their existing customer base and stand their ground against the neo banks and the challenger banks, traditional banking institutions will need highly integrated and scalable digital solutions. While cutting costs may become more pressing than ever, the banks will have to reprioritize their spending and dedicate adequate resources for digital transformations, cyber security, and data protection.

Another important pre-requisite while mapping the digital journey is to develop better operational capabilities. A transparent strategy along with an AI-powered operating model inclusive of clear-cut consumer-driven policies is what the banks need to prepare for a successful digital future.

The banks after COVID-19 - what will they look like?

The major transformation the banking sector will be experiencing is in terms of their radical shift from dragging legacy technologies to embracing more agile and scalable tech solutions fueled by artificial intelligence through varied collaboration approaches with fintech, big tech and ecommerce companies. When customers would prefer to operate their account online all the time, they would demand better designed, intuitive, and secure applications from the banks.

Digitizing the entire banking system will require a high-performing, interactive, secure, and UX-focused design. A prim and proper UX design guides the customer to complete their intended tasks securely, quickly, and easily. Trust is the core factor in banking and a good UX design would aid in achieving greater customer satisfaction ensuring enhanced customer loyalty. 

So, the prime question becomes, how to architect an ideal digital banking solution with UX as its focal point. I believe, for building an impressive, engaging, and resilient digital banking system there are many customer-centric factors the banks will need to consider. The most crucial ones include:

• Simplicity of the UI: The aversion towards adopting online banking is majorly due to the complexity of online experiences, making navigation challenging for the users. Simplified and easy-to-comprehend systems are critical to incorporate when digitizing the future banks.
• Ease-of-use: Banks are now innovating and trying to make it as easy for users to get connected with them and operate their accounts. Apart from simplifying the apps or web-interface, they are starting services like online chat with bank agents, AI-based chatbots, digital identity verification without requiring users to visit branches,  etc., enabling more customers to go digital with ease.
• Attractive UI: The digital space is highly driven by the visual aesthetics and is key to make the right first impressions on the customers. This applies to the banking sector, too. The more compelling and friendly your UI design; the better the customer experience.
• Personalization: From fashion to information consumption, the customer is demanding and embracing personalized experiences and will have the same expectations from digital banking solutions, too. To achieve this, the banks will need a robust AI system for analyzing customer journeys and custom-suit banking products that they need. Personalization will be the key driver for meeting the online sales targets for the banks.
• Transparency and security: Transparent banking processes and the seamless security systems will be the vital principles forming the base of a good UX design. The effective measures to ensure data and transaction security, along with efficient communication will be key to engaging and retaining the customers with more digital products.
• Mobile-first approach: The future of digital banks is in the palm of the people. A Deloitte survey found that out of 73 percent of people globally who use digital banking at least once a month, use mobile banking apps as well as access the bank’s websites through their phones. Taking into account the growing number of mobile users worldwide, banks should be building mobile-friendly apps and responsive websites with customer-focused personalized solutions.
• Digital banking ecosystems: With increased competition from the new entrants in the banking space, the development of ecosystems connecting banks, fintechs, marketplaces, other digital platforms into a single environment, with services being available seamlessly in a few clicks, is inevitable. The customers will soon demand an integrated banking platform and it is the right time to prepare for it.

Be at the forefront of the digital revolution

By the time the world recovers from the aftermath of COVID-19, banking institutions would have seen a vast transformation in their systems, processes, and customer relationships. New future-ready, digital banking solutions will offer as secure, as easy, and as welcoming customer experiences as the brick-and-mortar ones provide. At Maveric Systems, we help banks accelerate their transformation initiatives by integrating domain, UX design, technology, strategy, and execution. We have been enabling banks to achieve their customer satisfaction goals and accelerate their digitization journeys with modern technology solutions. A calculated and well-thought plan and collaboration with the right fintech solution providers will help get you ready for this dynamic and ever-evolving journey of going digital and help you to rise above such extreme situations, now as well as in the future.

This article is also published on Emerging Payments Association and can be accessed here