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How digital is guiding the finance sector’s response to COVID-19

Improving sustainability in finance with an effective IT lifecycle

By Rahul Singh, President of Financial Services, HCL Technologies

As COVID-19 spreads deeper and wider, financial transactions are slowing down, and emerging economies are suffering as a result. The challenge for financial systems is to ensure money is sent coursing back through the veins of the global economic system quickly. This needs to happen urgently, and has already started in the form of government-backed rescue packages, lowered interest rates and emergency measures.

Nation after nation is helping individuals and businesses to fight the crisis, with the UK offering a £330 billion support package to organisations. But an important – and by no means easy – step for every government contemplating similar measures will be to send money quickly to the right accounts, before the virus sends economies into complete stasis. Governments need to improve the availability of money at velocity, and the best way to ensure financial recovery is to look to technology.

How can digital offer the helping hand?

For money to be available quickly, financial systems must be digital, robust and connected. They have to be linked and networked to ensure rules are used to quickly identify beneficiaries, verify them accurately and have the funds transferred directly into bank accounts – much like India has done in recent weeks to ensure poorer members of society receive financial help quickly.

Across the world, banks are also announcing a range of support measures such as mortgage and loan holidays, while credit card companies are deferring payments. However, these actions could easily become a double-edged sword. If banking systems are not geared up to manage back-end processes, they could inadvertently send reminders for loan payments to those who have chosen deferment, causing undue concerns, or affecting the credit ratings of customers who may get flagged (incorrectly) as having defaulted on payments. To prevent this from happening, banks with crisis response policies must ensure they use artificial intelligence (AI) and robotic process automation (RPA) to accurately manage back-end systems and change business rules and processes quickly and at scale.

Banks should also go one step further. They can demonstrate the more humane side of their business by sharing limited customer data with partners, known as open banking. Data such as account balances, opt-ins to deferment plans, or customers’ postcodes to identify areas affected by COVID-19, could be used by partners to send targeted food coupons, special offers on retail purchases, health insurance, and even deferred or lowered utility and broadband bills to the financially vulnerable.

Banks would also do well to partner with governments to create COVID-19 related applications. For example, when a government announces cash grants to SMEs, a mobile app could allow the business to upload the documents to establish their credentials. RPA could then verify and authenticate the documents and automatically have the funds transferred to the business’s account before updating government records.

The skills question

Just as COVID-19 is about to fuel a new wave of digital innovation, it is also set to revamp the skills landscape in the financial services industry. Remote working, for instance, is already rising as a quick and clear path forward to get businesses economically and operationally back on track. Working from home is becoming the new normal, and aside from setting up the infrastructure and the security processes it requires, remote working will demand that employees are trained and reskilled – so that they can competently direct customer enquiries and perform crucial processes from the comfort of their own home.

The rapid adoption of automation, analytics and AI will also require employees to learn new skills. But there is good news on this front: the rush for new skills will be met halfway by intelligent co-worker bots or digital assistants that will make financial services employees’ lives easier. Practically every employee in an organisation will have a digital co-worker who has AI-backed skills like testing, accounts receivable, and year-end payroll skills, to improve efficiency and output.

Bouncing back from disaster

The financial services industry is about to see dramatic transformation as digital technologies get pushed to the forefront of our response to COVID-19. Remote working technology, AI, RPA and other emerging technologies will become essential to the finance sector to lower the impact of disruptive events in the future, and to come out stronger and better equipped to manage them.

For the moment, COVID-19 may be a major crisis point for financial services organisations in every corner of the world, but there is potential for it to be a pivotal moment that changes the entire future of the industry in a positive way. Financial services organisations must focus on adjusting to the new normal, adopt intelligent technologies that build resilience into systems, and reduce the need for human intervention for day-to-day operations. By doing this, the industry will also add speed to systems to ensure money reaches the people who need it most.

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