Banks have an Essential Role to Play as Systemic Stabilizers.

COVID 19 has created disruptive economic fallout within human society across all religions/races/geographies/countries/continents. The path ahead is hence a dangerous one, driven by epidemiological uncertainty.

While this situation is occurring for the first time in human history, this has also been an eye-opener to have a more comprehensive look at the way we operate. The footfalls of branch banking have decreased to a large extent, and banks have urged customers to use digital channels.

Table of Contents

COVID 19- An Accelerant to Digital Transformation
How to Increase Digital Banking Adoption
- Start with a comprehensive plan
- Keep employees morale up to get back on solid ground
- Leverage digital and traditional channels
- Enable Seamless Customer Experience

COVID 19- An Accelerant to Digital Transformation

The coronavirus (COVID-19) outbreak is indirectly promoting digital transformation, as many service providers, including banks, have significantly decreased or even closed their offline services, asking their customers to adopt the digital banking for any assistance. This trend is resulting in speeding up digital transformation. But, the question here is, are customers ready for this drastic change?
Yes, slowly yet firmly, Banks are witnessing customers picking up services that have distinguished digital capabilities. The mechanics of customer interaction has quickly shifted from physical handshakes to virtual communication over personal & extensive digital channels.
Learn more: https://capital.report/blogs/6-digital-banking-best-practices-during-the-covid-19-outbreak/8287
Consultant McKinsey & Co, in an article titled Leadership in the time of coronavirus: COVID-19 response and implications for the banks, reports that Banks have already taken a series of actions in reaction to the spread of COVID-19. Common steps we’ve seen include establishing a central task force, curtailing travel, suspending large-scale gatherings, segregating teams, making arrangements for teleworking, and refreshing external-vendor-interaction policies. It also highlights some of the fundamental changes banking organizations are going to need to make in the way they do business.


Workplace dynamics and talent management, already evolving in a digitizing world, maybe durably changed after an extended period of remote working,” it says. “Likewise, customer routines and expectations may also shift further in meaningful proportions, both in terms of digital adaptation and the expectation for proactive communication and care.

How to Increase Digital Banking Adoption

Digital is not a destination but it's a journey with more and more innovations and discoveries happening across multiple industries. But with COVID 19, it is a forced change for human society to adapt to a digital and contactless mechanism for business transactions between individuals or companies across the border (B2B, B2C, B2G, G2G, etc). The countries which are adopting this methodology are more likely to succeed in the new digital paradigm post-Covid 19.
Below are some simple steps you can use to increase customer engagement with digital banking:

Start with a comprehensive plan

To increase awareness of your digital banking platform, it is always essential, to begin with, a first cut action plan. In the current crisis, there are immediate actions banks can take to help retail and small business customers, support the use of digital channels so that customers can bank from home.
In the United States, many banks struggle to increase digital adoption among their customers; for example, nearly half of banking customers either never use their mobile app or do so infrequently.
According to McKinsey& Company, In the United States, the most satisfied customers use digital multiple times per week, the second-most satisfied customers do not use digital at all. The least satisfied banking customers are those who use digital tools infrequently, less than once per month. This is because customers go through a learning curve as they adopt digital tools, and most banks under-support their customers in the adoption journey. In the current environment, banks should redouble their efforts to smooth customers’ transition to digital. Here’s how:
• Easy-to-find and clear communication
• segment-specific campaigns
• remote coaching and advice,
• And unified experiences across each journey, such as written and video explanations for how to accomplish specific digital tasks, along with ways to try them out.
Banking services that involve branch interaction, digital tools can still play an important role by providing information on adjusted hours, essential services, reduced staff numbers, heightened safety precautions, social-distancing measures, and digitally-enabled queuing.

Keep employees morale up to get back on solid ground

One of the first things that can go for a toss in such challenging times is the morale of employees. It is natural for employees to feel frustrated. The uncertainty of the company's future, the fear of recession, and uncertainty around jobs can damage motivation, productivity, and can create a lot of fear among employees.
This entails bank managers to set precise directions for remote teams that are pursuing common goals. Bank managers should also take this opportunity to delegate and empower their employees for decision making. Both intrinsic and extrinsic motivation through rewards, clear spans of control, and meaningful appreciation can go a long way in supporting employee morale.
A vital portion of the employees is working from home facing operational challenges, such as internet-bandwidth issues, network connectivity, technology glitches, and childcare priorities. Following practices could help these banks perform a more effective distributed-work environment:
According to McKinsey &Company, following practices could help these banks perform a more effective distributed-work environment:
• Enable technology setup and infrastructure for remote work.
• Supporting remote-work technology and infrastructure
• Assisting employees with home-office setup
• Ensuring adequate VPN bandwidth
• Providing remote application access
• Adopting a suite of digital tools that facilitate effective communication, and decision making, such as videoconferencing, file sharing, real-time communication, coediting, and task management, and
• Ensuring that agents have the necessary tools and resources to handle calls from home while maintaining customer-data-confidentiality standards.
With all these features, it is also critical to ensure that agents are well-equipped with the necessary tools and resources to handle calls from home while maintaining customer-data-confidentiality standards.

Leverage digital and traditional channels

The more frequently a person sees a message, and in more places, the more likely they are to engage and take action. Banks need to maximize awareness by promoting their message across channels. Promote it in their branch and online, on ATM screens and in the call center.
Banks can also find ways to cross-promote digital banking. For example, during the new account opening process, it should encourage consumers to enroll in online banking. Or, if a bank or credit union is doing a credit card promotion, they can use it as an opportunity to cross-promote its mobile app.

Enable Seamless Customer Experience

For banks, spending on customer experience was essential before the current crisis, both from a “good business” perspective and a “good bank” perspective. Now, these aspects are even more relevant. It is highly important for banks to make their genuine concern for their customers clear and to make customer interactions with the bank as easy as possible.
COVID-19 has brought customers already under health and financial stress. They will need ready access to bank products and services. It is now more important, then, to reach customers through digital channels, stay connected through innovative communication channels, meet the needs of vulnerable populations, and stabilize critical infrastructure.
• Banks should encourage more customers to use remote channels and digital products whenever possible.
• Enhancing current digital offerings, identifying key functionalities, that can be improved quickly
• Speeding up the procedure to increase limits on online transactions and simplifying password reset.
• Keeping clients involved via SMS, mobile apps, and digital media
• Minimize disagreeable surprises to customers (such as potential branch lockdowns)
• Encourage fraud-prevention measures, clarify the availability of solutions on digital channels, and
• Define preventive measures to ensure the health and safety of clients and employees in branches.
According to McKinsey & Company, some financial institutions will need to address such technology gaps in order to offer a seamless digital customer experience. This will require planning ahead by scaling infrastructure capacity and network bandwidth, stress testing and scenario planning, managing near-term patches, and identifying urgent weaknesses in architecture.
Learn more: https://capital.report/blogs/9-best-fintech-apps-to-use-while-at-home-during-the-coronavirus-lockdown/8273

All in All

Coronavirus difficulties provide an opportunity for new businesses to thrive based on a new digital reality – completely digital and contactless. Digitalization has found a new meaning and it is going to reach newer areas. The world is thinking about implementing ways to lessen the disruption caused to humanity. This is the perfect time to focus on digital transformation by realizing the necessities accelerating it.