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COVID-19: Impact on retail banking and why banks should move towards digitization

retail banking, digital transformation, future, digital solutions

Banking and Financial Institutions worldwide are looking for ways to evolve their business due to the changing regulatory and compliance norms. While think tanks across banks have been working towards managing the current pandemic crisis, there needs to be a focus on redefining business strategies to help prepare them for the future.  

Since banks rely heavily on physical visits from customers, they need to change their entire way of business by maintaining social distancing and executing safety precautions across all their branches and offices. It can lead to challenges, such as a decline in revenue due to lower customer footfalls, remote working of staff, and higher costs to ensure operations.

The growing consumer expectations have forced banks to adopt digital banking solutions and embrace new technology for business continuity and growth. While the banking journey is a mix of physical and digital processes, it is time to transform into a digital-based journey.

Despite these added pressures and challenges, the current situation provides significant opportunities for banks to transform themselves by adopting online banking solutions, digitalization, enhancing productivity, achieving agility, cost optimization, and becoming profitable.

One of the questions CFOs were asked in PwC’s COVID-19 CFO Pulse Survey was “Which of the following financial actions is your company considering, as a result of COVID-19?

3 Key Focus Areas for Bank to Become Future-Ready

  • Re-engineer the business continuity process

The first step would be to adapt to the new situation and make all the changes required. The banks will have to adopt and deploy new and advanced technology and implement new standard operating procedures (SOPs) for internal operations and customer-facing activities. Banks should offer customers a seamless service across various touchpoints, branches, ATMs, kiosks, digital assets, and support centers. 

  • Cost optimization

Banks should optimize operational costs, which will require tracking processes and systems, monitoring them till they achieve desired results. 

Back Office: Deploy automation and enable remote working features. 

Customer Service: Develop digital processes to resolve queries and increase the use of chatbots. 

IT: Monitor the use of systems and implement processes to utilize available resources. 

Marketing: Evaluate the campaign costs and use analytics to create targeted campaigns for better results. 

  • Digital Transformation

Digital transformation means embracing technology, adopting digital solutions to enable contactless meetings, sales, customer onboarding, documentation, customer- employee/employee-employee interactions. It also includes having a web portal and mobile applications that allow customers to access banking information at anytime from anywhere. Training and upskilling of existing resources, offering omni-channel services will help boost efficiency and performance productivity. 

Bank Initiatives for Digitization Journey

  • Leverage artificial intelligence (AI) and machine learning capabilities, including natural language processing across customer touchpoints 
  • Encourage the innovation culture for products and services
  • Equip the sales force with digital know-how to better manage data and generate sales within the remote working model 
  • Revisit business strategies to capture new market segments through new products and channels
  • Collaborate with Fintech and other such partners to boost business for easy payments, onboarding, KYC, digital underwriting, and collections
  • Boost productivity with data analytics support
  • Strengthen data and cybersecurity measures

How Fast can Banks Adapt

It is all about the speed of change, adapting to changes, and embracing the needs of the new normal. The customer’s preferences grow, and with access to several digital channels, they demand information at the touch of a button. Banks should ensure real-time engagement and with the risk and compliance teams to maintain order.

The future is moving towards a digital-powered economy. It is now time for the banks and other financial institutions to evaluate their current capabilities and reassess the shift required. Technology, data, and decision-making tools should accelerate growth and edge over the competition. 

At Neutrinos, we offer customer-focused digital banking solutions to forge stronger relationships. 

To understand how you can achieve digital transformation in the banking sector, read this blog.

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