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How should banks approach our new reality?

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By David Donovan, EVP of Financial Services Publicis Sapient 

Prior to a few weeks ago, our ways of working fell into two categories: work that can be done remotely using tech, and collaborative “agile” work which is done using cross-functional teams, often co-located or via in-person meetings.

There is a spectrum of how we do work, from pure knowledge, highly tech-enabled, to pure collaborative, highly co-located. COVID-19 has forced a situation which has shown us how we can push ourselves further toward the collaborative side of the spectrum using technology. While the majority of banks were already beginning to move in the direction of digital, institutions that have made investments in technology are generally experiencing less disruption from COVID-19 than their competitors that had not made headway on the digital shift yet.

For many banks the collaborative “agile” work is harder. Only 17 percent of banks had a sound digital strategy in place before March, which means the majority of banks have now had to shift rapidly, or attempt to, in order to meet their customers’ needs; all of this while experimenting with tools and capabilities that enable their internal teams to work without being co-located.

This crisis has exposed cracks in the banking system that is a result of too much dependence on legacy technology. This has been problematic for many banks as they try to keep up with demand from their customers, particularly as the SBA PPP loan offering has come out this past week. The banks that still have legacy mainframe back-end systems cannot onboard new customers and complete KYC and AML checks in an effective and fast way.

According to new research from SRM, 82 percent of banks rated their online and mobile channels as “vital” to operations during the pandemic. While we’ve already been seeing branch footprints experience a multi-year downtrend, the response to COVID-19 has seen extensive closures that will continue to quickly accelerate the move to digital.

What have banks already been doing, and should continue to do for their customers?

  • 79 percent of banks have provided information on how to utilize their remote channels in an effort to educate consumers unfamiliar or uncomfortable with digital channels.
  • They have waived fees and deferred payments
  • Beefed up their cyber security to address fraud that becomes extremely prevalent in times of high economic anxiety. Banks have taken to warning customers of phishing attacks via text message and e-mail where fraudsters are looking to take advantage of potential check recipients.
  • Banks need to be involved in government guaranteed loans, and help to find a solution to increase participation in the program, while also creating scale for people that need loans.

In this new reality, what can banks do to improve business performance using digital transformation?

Operational efficiency and customer experience: Look critically at how to transform customer journeys to provide consumers with the right combination of high-tech and high-touch experience, while at the same time optimizing the cost/level of live engagement that is required from front-to-back business operations.

Effective and efficiency collaborative work:Redefine what work means and how to collaborate within their organizations. Optimize interactions, meeting costs and travel costs to drive more profitability within their enterprises, while increasing collaboration to drive the top line.

Preparedness for an infrastructure to deal with crises: Understand what it takes to continue functioning when disruption happens in an era of global travel, connectivity, fraud and threats. Create the data sharing and analytics infrastructure required to understand and deal with the cause of the disruption. Implement the infrastructure required to support customers and operate with colleagues throughout the crisis and beyond.

While we know that work doesn’t need to be face-to-face, collaborative technology platforms enable us to get collaborative work done. We have all been shoved into becoming comfortable with remote work and for many banks this requires a deeper investment in tech infrastructure. Coming out of this experience, all companies should have one big take-away – be prepared for anything.

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