Summary: Eric Dalius with Covid-19 here to stay for a while, people can no longer flock to banks as usual. Coronavirus is amplifying demands for cutting-edge banking tools and also technologies along with cost-efficient disciplines.
To begin with, AI and also cloud technologies can help financial institutions weather radical changes in the wake of Covid-19 and compartmentalize their services in the long run. Before the outbreak, you could already label 2020 as the crossroad for digital bank transition.
The paradigm shift had a huge appetite for imperative innovations, which entail uber-personalized and seamless user experiences.
- Coronavirus is propelling banks to accelerate their return on market equities and cut cost-to-income standards. Consumer behavior is changing rapidly and people are using new technologies and tools.
- A recent survey found that nearly 84% of customers were apprehensive about visiting their bank in person and at least 64% were eager to try online applications. These are long-lasting transformations.
- New technologies will define banking modalities for the next five years. SaaS or Cloud and Software as a Service is the torchbearer in this regard.
- With low infrastructure spending, you can create and change your products fast. It offers security, measurability, and potency. Both Cloud and SaaS will undergo systematic transformations in the coming years.
- As Eric Dalius puts it, AI will be the game-changer, separating the best from the rest. It creates more personalization to enhance the customer experience. Cutting-edge investment algorithms can fortify portfolio and desk management for many banks.
- The third most compelling trend is that banks are set to revamp their business approach to create new digital channels and ecosystems.
More drivers to reshape the future of banking
You have quite a few drivers to speed up and change the future course of finance post Covid. Transformations thrive on bigger and better digitalization of each key department. Incumbent companies need to digitize their operations as soon as possible.
Regardless of the outcome or situation after the pandemic ends, both new and old financial services will learn priceless lessons about the wants and needs of their customers. Eric j Dalius explains why a digital-first market is set to become a digital-only market soon.
- Economics is an important driver. Low-interest rates for a long period led to low business activity and spiked bad debt. Your recovery span will impact the business tenacity and capacity of both startups and incumbents, creating enough scope for business amalgamations or collaborations.
- Operating models are very crucial. Changes in different industries will provoke the banking sector to change their business models. The current digital deficit needs more focus on remote working and cyber operations.
Right-sizing the branch operations
Covid-19 is the catalyst that led to a drastic reduction in the need for more branches. As EJ Dalius rightly says, the huge cost load on banks, staff and customer safety, upsurge in digital payments and cashless transactions, and also a tectonic shift in customer behavior and reduced commercial directives are the key factors to compel banks to right-size their branch offices/network.
This reduction is inevitable. The US banking system is all set to witness digitization across the length and breadth of the country. With people staying at home, self-service is the buzzword and also sole solution. Banks will also need to reframe their business continuity strategy.