Reimagining Retail Banking: Post-COVID Banking & Financial Sector Digitization
The COVID-19 pandemic has altered the thought process of individuals, disrupted the operational structure of industries, pushing each to think beyond what was once considered normal, before the pandemic upended it. The way things look at the present, there is no going back to the old normal, rather the world has to move on and evolve, innovating sustainable solutions for a robust future. It’s time to reimagine and reinvent. The write-up highlights post-COVID transformation of the banking and financial sector through digitization and the impact on retail banking.
In the post lockdown days and months that will follow, banks will reach out to tech firms to rebuild their infrastructure for a robust digital foundation. USA based HashCash Consultants have extended their guidance and services for post-COVID digitization of banks and financial institutions, among various other major sectors.
Similar efforts have been seen on behalf of companies like IBM and Deloitte that are connecting and partnering with the financial sector with offerings to streamline the operational architecture through digital inclusions.
Accenture too has responded to the pandemic crisis by offering financial sector and other businesses with advanced automation and virtual augmentation tools. More tech efforts will keep surfacing in the days that will follow.
Given below is a detailed account of the pandemic disruption and an analysis of the probable solutions that can revive retail banking and other financial services.
Retail Banking Disrupted by COVID-19
Banking is one of the major sectors whose services got heavily disrupted during the lockdown period. Most of the physical branches were closed down, and the ones that were still functioning were doing so with a limited workforce to prevent contagion. Even so, due to the increasing numbers of COVID-affected making headlines every day, people avoided visiting the branches.
Now as we move ahead into the post-lockdown phase, bank branches are opening. The management has been promoting safeguard measures taken to ensure consumer and employee safety. The number of people inside the branches at a time has been limited, thorough sanitizing protocols have been put in place amongst other precautionary measures. Nevertheless, the panic of contagion is still too fresh in the mind of consumers to make them visit physical branches freely like in the old days. So, is this the end of physical branches for retail banking?
The Digital Reboot of Retail Banking
There will come a day in the future when we won’t need to go to bank branches, but that is not now. It is a vast and gradual process that needs restructuring of core ideologies and infrastructure and reshaping the consumer mentality around it. That being said, branches will exist but there will be a significant change in the layout, design, and operations, powered by a whole lot of digital inclusions. The evolution has started with post-COVID banking and financial sector digitization and automation.
The institutions that have previously invested in creating digital solutions have a competitive advantage at this point as people are gravitating towards solutions that would not require them to visit public places like bank branches. As consumers seek digital channels, it will result in better awareness concerning the use of fintech alternatives.
Educate the Consumers
The reliance on branch banking is mostly seen among the senior age groups. The other age groups prefer to fulfill their banking needs through interaction with a primary financial organization through digital avenues. The younger generation, notably Gen Z has the strongest preference for online and mobile banking. Given such data, it falls back on the banking machinery to stress on educating the consumers about digital banking, making it acceptable to all.
Mobile/Digital Payments Surge
The usage of mobile payments or digital payments has experienced a surge in the lockdown months, as people were left with no other option. The predictive analysis says, that in the coming day's people will prefer using digital payments more than the traditional modes, with simultaneous use of contactless cards, advanced POS devices, etc. The retail banking sector will have to ramp up its technological division with scalable digital and automation solutions to meet the changing needs of the consumers.
In-House Digital Transformation
The reluctance to go remote is majorly influenced by the banks’ lack of technological efficiency when it comes to operational architecture. Most of the major services are still manually dependent, making the consumers cling on to those out of habit. There needs to be an inside-out reformation through digitization. Without that, consumers will be confused and stuck with disjointed banking infrastructure. Hence focus should be on building scalable mobile applications and platforms.
There was never a better time than now to implement advanced technologies like open banking APIs, RPA, cloud computing, advanced analytics, and IoT.
Retail banking at the moment should focus on three major strategies, which are eliminating the necessity of visiting a physical branch, improve the digital education of the consumer, and enhance security and safety measures.
On a concluding note, there is no abrupt shift from old to the new. It is a gradual transition that has been accelerated by the pandemic disruption, paving the way for a retail banking architecture that is less dependent on physical branches and more resilient through post-COVID digitization of banking sector.