Constant change is our reality - so how can banks adapt?

We are seeing a state of flux in several areas of banking: customer needs, environmental obligations, banking requirements and more. Until now, it has been a struggle for banks to keep up and manage every single aspect of this transformation – from the individual level right up to the corporate level.

For example, the proliferation of government-backed lending this year will have a knock-on effect in 2021, as there will be a lot of people who will be unable to pay the money back. In these scenarios, banks will need to cover the costs of managing the case as well as providing evidence to the government.

This environment means that the spotlight will continue to be on banks to do the right thing. To avoid any slip-ups, financial institutions need to ensure that the right processes and documentation are in place to cover themselves and ensure they are doing the right thing by their customers should something go wrong. Credit delinquency was a serious problem for banks in the last recession but all indications are that this will be worst in 2021. So how can banks deal with this problem better this time around?

Banks can leverage customer engagement solutions to improve how they manage their relationship with customers who are likely to fall into financial difficulty, to better meet their needs and reduce missed opportunities. There are tools on the market that enable banks to guide and support customers through change. Financial organisations can use AI to analyse millions of customer interactions and suggest the best course of action for the bank’s next interaction with each unique customer in a matter of seconds. For example, it might suggest providing educational materials on money-saving tips to someone who has just lost their job, or a personalised saving plan for someone low on cash for a longer period. Banks can also use tools to suggest new repayment options and suitable products that might help their customers get out of debt.

Using technology to support customers through constant change is important, because one inconsiderate action by a bank can make the difference between winning client loyalty and losing trust. 2020 has been the toughest year of many people’s lives, so listening to customers and being able to provide support in the way each individual needs it is vital. Modern software allows companies to tailor communications to each customer to make sure messages are sensitive and empathetic to those in difficult financial situations.

There is also the need to redistribute members of staff to cope with new demands, and also train them to cope with these new situations. Again, this will require the right technology to support these changes. Banks and financial organisations need to move away from traditional CRM systems with limited capability and towards flexible low-code software architectures. Such modern platforms can be adapted over time to offer banks the capability to deal with new tasks. Because the technology is low code, it does not require specialist programming knowledge and can be realised quickly and efficiently. Agile technology also means banks can implement standardised processes for each and every task a bank might need to carry out. Unified case management and standardised workflows make it easier to train workers, especially remotely, as there is one source of truth. This allows employees to work more effectively, boosting job satisfaction as a result.

We are not out of the woods with the coronavirus pandemic yet, but even if we were, constant change would still be our reality and this crisis has sped up a lot of digital change that was underway. The only way forward is to be ready to react and adapt, and having the right technology is the first step.