6 Digital Banking Best Practices During the COVID-19 Outbreak

STEVE KENT | April 7, 2020

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As the financial industry navigates the uncertainty of the COVID-19 pandemic, one thing is clear: digital banking has never been more important to financial institutions and their customers. While digital channels like mobile banking apps have always offered convenience, they now offer physical safety as well. With a digital approach to these extraordinary circumstances, banks and their customers can rest assured that social distancing does not mean financial isolation. Here are six best practices your institution can use to encourage and enhance digital banking channels given the unprecedented nature of COVID-19.

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Domain Associates

Founded in 1985, Domain Associates, L.L.C. is a venture capital firm with an exclusive focus on investing in life science companies that advance human health. Domain’s focused network, deep experience, and dependable reputation of this team have made it one of the top private-equity groups participating in healthcare investing. With $2.4 billion of capital under management, Domain invests in three major segments: pharmaceuticals, diagnostics, and medical devices.

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Tracking the Future of Cross-Border Payments with AI ML and Blockchain

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[ii] Additionally, AI has the ability to empower bankers, not only by eliminating manual tasks, but also by being able to equip them with powerful insights around relationship profitability and credit risk. By refining sophisticated, machine-learning based models, banks can more accurately predict and leverage metrics such as probability of default and loss given default within risk-based pricing models to provide competitive lending rates to borrowers, while still maintaining healthy profitability at the relationship and portfolio level. Reshaping customer engagement The acceleration of digital banking due to the COVID-19 pandemic and the rise of customer-centric titans have put significant pressure on financial institutions to modernise and reshape their approach to digital banking to appease rising customer expectations. Customers not only expect a frictionless and seamless onboarding process, but for their bank to act as an ever-present financial advisor, offering personalised insights on spending habits, money management and financial decisions. AI-powered virtual assistants and chatbots offer new levels of accessibility to common questions by utilising natural language processing to find past transactions, access credit scores, and view balances. However, institutions can take a further step of both anticipating customer needs and offering targeted product suggestions based on propensity scoring models. Proactively offering recommendations can be helpful to customers due to the complexity of different financial products and enables banks to simultaneously satisfy customers while unlocking new revenue opportunities. FIs can leverage AI to operate as a dedicated advisor, offer a differentiated customer experience, and reduce customer churn. 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As the uncertain pandemic recovery continues, leveraging AI-powered predictive models in combination with delinquency tracking, credit migration modelling, and other tools will continue to be critical to align actual portfolio risk with the risk appetite of the institution. As AI adoption continues to mature, FIs should avoid sporadically focusing on isolated use cases. Instead, organisations should strive to align strategy, organisational culture, and digital infrastructure under a united AI strategy. This will help enable them to capitalise on revenue growth, operating efficiency and cost savings, from the front to the back office, and across all lines of business.

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Spotlight

Domain Associates

Founded in 1985, Domain Associates, L.L.C. is a venture capital firm with an exclusive focus on investing in life science companies that advance human health. Domain’s focused network, deep experience, and dependable reputation of this team have made it one of the top private-equity groups participating in healthcare investing. With $2.4 billion of capital under management, Domain invests in three major segments: pharmaceuticals, diagnostics, and medical devices.

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