Banking
Continuous COVID-19 lockdowns: The digital opportunity for banking and finance
Published by linker 5
Posted on January 29, 2021
4 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by linker 5
Posted on January 29, 2021
4 min readLast updated: January 21, 2026
By Matthew Williamson, VP of Global Financial Services, Mobiquity
Impact of COVID-19: The acceleration of digital services
The closure of bank branches among leading retail banks demonstrates the true scale of COVID-19 and a shift in customer behaviours. Banks are now adapting and future proofing their business models in response to societal changes accelerated by the pandemic.
According to Finder, over a quarter of UK adults – around 14 million people – now have at least one digital-only bank account, as a perpetual state of COVID-19 lockdown combined with a rise of digital banking has predictably followed the closure of physical branches. In lockdown, proximity to a local branch is not as important as it once was, with the ability for customers to access a variety of digital alternatives.
The shift in customer behaviours has put increased pressure on banks to not only accelerate digitisation, but to ensure that traditional customers are fully supported – from the physical in-branch experience to a digital one.
The challenge of continual lockdowns
With the continuation of national lockdowns across the UK and throughout the world, it’s important that banks and financial institutions seize the digital opportunity. With new COVID-19 variants at large, banks need to prepare for a flexible model that absorbs the impact of changes to working practices and an increased demand for digital services. Dare I say it, we need to prepare for a future where lockdowns are commonplace!
To meet the demands of a stay-at-home society, banks must act quickly to identify the aspects of their digital customer journey that cause frictions among their existing and prospective customers.
In our ‘Banking Friction’ report we examined UK digital banking app reviews, highlighting the main frictions where banks can improve their digital experience. We found that although major UK retail banks have an average app rating of 4.7 out of 5, specific app features – such as login and sign-up (2.0), notifications (2.5), and customer services (2.6) – had lower ratings. This shows that there is work to be done among traditional banks in their digital onboarding processes.
Overcoming banking frictions
During COVID-19, digital technologies are more important than ever, as they enable companies to remove friction from their customer journeys – providing a touchless experience to overcome health concerns and increase convenience.
It’s clear from our research that banks need to focus on improving their digital onboarding experience, and they must act now to overcome these frictions if they are to retain customers along the physical-digital transition.
An example of a bank that has removed the frictions in digital onboarding is ila Bank: The first digital-only bank in Bahrain. We worked with Bank ABC to build ila Bank and help them digitally onboard customers, enabling customers to upload a ‘selfie’ and a picture of their ID to speed up the authentication process. Onboarding for each customer took under five minutes and – once completed – we implemented a celebration screen to make every customer feel special and rewarded. In addition, ila Bank has also enhanced its customer experience by harnessing AI to create a virtual assistant, named “Fatema”, providing a 24/7 personalised banking service.
The future of banking
There’s no doubt that the COVID-19 pandemic has accelerated a shift to digital banking, but will this shift signal the death of in-branch banking?
No one can know what the future holds, but what we do know is that when society returns to a sense of post-vaccine normality, banks will explore new ways in which they can increase the level of accessibility to their service offering – to bank anywhere, anytime.
You could be visiting your local coffee shop and while you’re queuing you receive a message from your bank with a promotional offer for a free coffee, to incentivise the on-boarding of their banking app. Once fully onboarded the bank now has an easier way to communicate and support their customer in their banking needs. With technological innovations like this, banks can improve customer loyalty, retention and grow their client portfolios.
The future of the branch strategy could also include a community financial services hub model. This is a collaborative project where banks occupy the same retail space as other businesses, reducing overheads – especially if there is a continued decline in in-branch banking due to subsequent lockdowns.
Customers who require in-person banking services can visit the hub, where they will be greeted by a digital assistant who identifies the customer and directs them to the relevant banking service. By offering a premium for the traditional banking experience, banks can carve out new revenue opportunities while provisioning for customers who require face-to-face banking. It is imperative that the future of banking should accommodate those who can’t, or may not want to, use digital services as well those who do.
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