Against a backdrop of immense uncertainty, the pressure on financial institutions to adapt quickly to changed circumstances has only accelerated as banks respond to the current pandemic.
Undeniably, COVID-19 is having a profound impact on the industry. Yet, whether it’s keeping employees safe and productive through new ways of working or ensuring quick responses to customer inquiries via a chatbot, many financial institutions are rapidly adjusting to the situation.
This flexibility and drive to continue to deliver for customers will be critical for banks and credit unions in the long term. And as they prepare to facilitate a new normal, a helpful framework to follow consists of three essential elements: Respond, Recover and Reimagine.
Respond: The Changes Will Keep Coming
Responding began at the outset of the pandemic, but even as we slowly emerge from lockdown status, developments continue to rapidly unfold, and are sometimes as challenging to deal with as the initial events. Ensuring everyone has access to the latest information, reports and analysis is a vital part of any crisis response and builds trust among employees and customers. Social distancing measures will continue for some time, influencing how we work, communicate, and collaborate. That means effective and efficient channels of communication beyond face-to-face will be even more important as time goes on.
Harnessing new or improved tools and technology can play a vital role in ensuring strong levels of communication as situations develop. From implementing crisis communication apps that coordinate responses rapidly, to deploying chatbots to support strained customer service teams, banks and credit unions can take advantage of an array of solutions to overcome key communication challenges. In addition, ensuring digital touch points between staff and customers will also allow banks to reach the high-priority customers and high-risk communities that are most in need.
Recover: Personalization Will Matter More
It’s become clear to most by now that individuals are being impacted very differently by the pandemic. Even just looking at one factor — whether a household still has income coming in — sets up many different concerns and priorities that financial institutions need to address.
A study by Accenture argues that consumers will remember for a long time how they were treated during the next six to 12 months, so ensuring a considered approach now is vital. Banks and credit unions can’t afford to make decisions and recommendations based on guesswork. Instead it will be important to take a more personalized approach, based on data-driven decision making.
To do that, financial institutions will need to create a comprehensive data strategy to consolidate the information at their disposal into actionable insights. By doing so, institutions can ensure a seamless, tailored experience that meets customers’ needs and priorities.
Additionally, financial institutions will need to address inefficiencies in their operations if they hope to handle increased customer demands and expectations. This will require revisiting current operating models to ensure they’re fit for purpose. It will be important, for example, to have a clear view of projects that can be de-prioritized, and those which should be fast-tracked to tackle issues that need the most attention. A few examples of projects that can optimize operations include:
- Assessing which tasks can be automated to reduce strain on employees.
- Improving digital servicing capabilities for customers.
- Utilizing cloud solutions to manage risk.
Reimagine: A Digital Roadmap Requires People to Lead
As financial institutions shift from tackling short-term issues towards a longer-term vision, it will be important to focus on how they can further utilize key learnings and best practices to reimagine their business for the future.
“Redirecting an institution using a strong digital roadmap will no longer be viewed as an innovation but as a clear expectation.”
— Marina Arnaout, Microsoft
This is critical because the pace of change facing the industry will continue to accelerate as consumer preferences pivot towards online services, apps and chat functions, and as employees grow more accustomed to new ways of working. The result of this ongoing and increasingly rapid evolution will be that redirecting an institution using a strong digital roadmap will no longer be viewed as an innovation but as a clear expectation for banks and credit unions looking to thrive.
Moving from pockets of digital innovation to the wide-scale implementation of such technology as artificial intelligence and machine learning will be crucial for financial institutions, equipping them with the tools to further develop personalized experiences for customers, drive efficiencies and ensure enhanced security.
Yet, ensuring business longevity requires both a technical and cultural transformation. It is our view that human ingenuity is what will make the difference — technology alone isn’t enough. Banks and credit unions will need to ensure teams are equipped with the skills and knowledge they will need to succeed in the long term. This, in turn, requires strong leadership and training initiatives to empower staff to achieve more.
In this extraordinary period, financial institutions have a unique opportunity to build trust, drive innovation and continue to deliver for their customers. Success tomorrow will require a vigilant effort and we’re already seeing banks and credit unions working incredibly hard to quickly adapt to support those in need.