It is increasingly clear that the entire banking ecosystem and the way consumers interact with financial organizations have been shaken to the core as a result of COVID-19. We will look back on this period as a tipping point between the period before COVID-19 and the new normal that emerges in the post-coronavirus era.
In much of the pre-COVID-19 research conducted by the Digital Banking Report around digital transformation, customer experience, use of data and advanced analytics, innovation and technology, it was clear that industry leaders knew what needed to be done, and in many cases, how to proceed. There just was not the urgency to take action since we were in prosperous times. Everything changed with COVID-19.
In the ‘new normal’ period, we have witnessed an environment where the way work is completed, how consumers bank, how employees learn new skills and how brands are perceived are all different. The degree to which these changes take root will be driven by both business and societal dynamics as well as how long it takes to move to a new equilibrium.
In a special report, After the Virus, Cognizant’s Center for the Future of Work examines the implications of COVID-19 five years from now as it relates to work, education, entertainment, e-commerce, human engagement and the environmental agenda. Using these insights as a foundation, it is possible to build a perspective of what the banking industry must do in the days, months and years ahead to be in a better position for the future.
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A World That Became Digital Overnight
Before COVID-19, the banking industry did a great deal of talking about ‘becoming digital’, but less than 15% of organizations considered themselves digital transformation leaders. In fact, during the long lasting recovery and prosperity experienced for more than a decade post financial crisis, very few organizations ‘bit the bullet’ of building a digital-ready bank.
When the coronavirus pandemic hit, everything changed … overnight. Organizations were forced into not only providing consumers digital banking alternatives, but employees as well. As Cognizant mentions, “Everything that could move online, did move online.” For those organizations that were not prepared, new business opportunities were lost, customer satisfaction suffered and employees were inefficient.
Rather than simply adjusting to a new world order, many organizations have found ways to move beyond what was thought possible in the past. A great example is how teachers, no longer held to previous universal testing standards, provided students the opportunity to explore far beyond a set curriculum … making learning fun again. In banking, more collaboration was done using video technologies, speeding up innovations that used to take months or years.
Why would education, or banking, move backwards once the potential for digital transformation has been realized? Why would a financial institution require a customer to visit a branch to complete an account opening or loan application? Why wouldn’t every organization reevaluate the friction in digital processes and make them as seamless as the best digital-first organizations?
Read More: When Opening Accounts in Branches Becomes Impossible
A New Future of Work (@ Home)
The discussion about working from home for most banking employees was just that – a discussion. At best, it was an exception allowed for a few due to illness or for those who were associated with outside sales. Usually, requests to work from home were dismissed out of concern for lost productivity. When COVID-19 hit, working from home became a necessity for almost everyone.
While the initial 7 – 10 days was anything but smooth, most workers who never had experienced the challenges of working with an entire family at home settled into a routine. New equipment was purchased, new working environments were created, and new work schedules were set (balancing work and family needs).
As we look to the future, some workers will return to the traditional office when the coronavirus crisis subsides. But many will not. According to Cognizant, “Offices will not die out completely. But the notion of spending 40, 50, 70 hours there a week will. The office was a product of the Third Industrial Revolution. The fourth one, floundering in its infancy pre-COVID-19, really took off as the virus hit – and the office [will be] another casualty.
The question is, will there be a need to build 50-story bank headquarters in the future?
Opportunities for Physical and Mental Creativity
When written in Chinese, the word ‘crisis’ is composed of two characters — one represents danger, and the other represents opportunity. Whether a crisis is viewed as a crisis, or an opportunity depends on whether the focus is on what is lost or what can be gained. The question becomes whether we can keep the challenges in perspective and focus on the potential benefits.
With the closing of gyms, community centers and health clubs, and the long-term impact of social distancing, many people struggled initially to maintain their physical and mental well-being. This is understandable, especially for those who depended on a disciplined routine.
As with many of the other abrupt shocks to the normalcy we all enjoyed, many people became creative with their exercise routine. Some used downloadable apps that could provide an at-home alternative (often created by the same organizations that managed the physical facilities that were now closed). Some purchased new equipment while others completely changed their way of burning calories.
Despite working from home, most people may not have much free time during the regular workday to try new things. But if you were used to socializing at night or on the weekends, being home bound provides the opportunity to take new courses, upgrade current skills or follow a personal passion.
Many organizations also are creating digital learning programs to prepare employees for the post-COVID-19 world. This will be a major trend in the future as talent in many fields (digital analytics, programming, new technologies) will continue to be in short supply.
Purpose Before Profit
The COVID-19 crisis has shut down many businesses, impacting employees and the customers they serve. At the same time, many governments have been slow to react, putting the burden on companies to provide relief. The good news is that many large and small organizations have stepped up to help their employees, customers and broader communities in which they operate.
In addition to converting production lines into manufacturing personal protective equipment, or donating funds to local food banks and charities, many organizations have helped their workers survive financially. Other organizations have hired displaced employees from other industries to supplement current workforces. This does not go unnoticed at a time when ‘good news’ is hard to come by.
Without knowing when life will get back to ‘normal,’ there is more pressure than ever for organizations to innovate and ‘think outside the box’. The good news is that the financial institutions that step up to meet these challenges will benefit from a brand and shareholder perspective.
In the future, sustainability, or a companies’ relationship with the natural environment, social causes, and corporate governance, will become more important than ever. Most people have seen the environmental impact of ‘shutting down the world’. It is dramatic to again see the skyline above Los Angeles or the new pollution map or Beijing.
Once we move beyond COVID-19, sustainability initiatives will be more valued than ever by consumers. Now is the time for financial institutions to prioritize these initiatives going forward.
Now’s The Time to Envision the Future
While nobody can be certain about what the post-coronavirus world will look like, there is one reality that has been proven without a doubt. Change can happen in an instant. The key is to imagine possible outcomes and set in motion those initiatives that can position your organization most advantageously. The following are most likely outcomes:
- Being ‘digital’ is not optional.
- Working remotely will become much more common
- Innovation is an imperative
- Personal development will protect people from unforeseen circumstances
- Sustainability will be valued by consumers and shareholders