By Andy Schmidt, Vice President, CGI
The Novel Coronavirus, also known as COVID-19, is having a massive impact across the globe. Although severity and approaches to dealing with it vary as governments come to grips with the pandemic, one thing is clear: we will get through this. The question is how, when disruptions in day to day life and business continue to grow?
In times of crisis, the preservation of essential functions and services is critical. Financial services fall squarely into this category; payments, lending, and trade are the lifeblood of the global economy, even in challenging times. The good news is that the sector has always adapted to new ways of working – the question is “how fast?”. With this in mind, the following list provides ten concrete examples of how the financial services will change, at least in the short term, in reaction to COVID-19:
- Digital payments use and adoption will increase more quickly than normal
In this current climate of social distancing and with the World Health Organisation’s (WHO) recommendation to avoid using cash, the use of digital payment options will grow more quickly than usual. At the moment, this trend will be seen primarily within the banked population. For the unbanked who lack sufficient funds to make a bank account (and thus the source for electronic payment) worthwhile, the current pandemic will likely not be a sufficient driver for adoption.
- CIOs will look to bring more work in-house
Also referred to as repatriation, CIOs are looking to have more of their work done by bank employees for two reasons: 1) cost – in some jurisdictions, means the requirement to provide contractors with the same benefits as employees may make them more expensive than employees, 2) control – having contractors managing key systems creates numerous points of failure should the contractor leave before knowledge transfer can take place.
- Use of digital channels will grow more quickly than normal
With many countries going into effective lockdown, those seeking information about their accounts, as well as other banking products, will make heavier use of digital channels, including telephone.
- Interest in chatbots and AI will increase
With the rise in digital channel usage comes the need to manage interactions more effectively. The strategic use of chatbots will greatly aid in providing customers and prospects with the information they need via the most cost-effective channels.
- Teleconference and video-conference use will skyrocket as remote interaction becomes the norm
One of the key reasons for having a face-to-face meeting is to build trust. With business travel curtailed, if not cancelled, for the foreseeable future, using teleconferencing will help keep customer relationships moving forward. At the same time, banks will need to ensure they have access to sufficient bandwidth to support their videoconferencing, as well virtual private network (VPN) to enable employees to remain productive if they have to work from home.
- Data projects will continue to pace up, as will the focus on cloud-based services
Regardless of the environment, banks will continue to search for ways to improve service, shorten time to market, increase revenue, and decrease cost. Making better use of data will unlock important insights about customer and bank needs, while continuing to pursue a cloud agenda will give banks access to the offerings and processing capacity, they need to modernize their business.
- APIs will become (even more) mainstream
Although application program interfaces (APIs) have been around for years, it is largely the move toward open banking (whether by regulation or market interest) that is driving banks to make them available to clients and potential partners. As concepts like Banking as a Service (BaaS) accelerate, expect to see banks more active in the use and publication of APIs to help them access and provide the services that will drive their relevance with clients.
- Branch access will change
In an effort to protect clients and employees, some banks will close branches while others will change their hours of operation and/or limit the number of people who can be in the branch at a certain time. Additionally, some banks may take a cue from the supermarkets by having certain hours of the day devoted to more at-risk populations like the elderly and the immune-compromised
- Loan and rent collections will be put on hold
Although much of the world is on pause at the moment, interest continues to accrue, and rent comes due. However, paying these debts can be challenging when there are questions about job loss, healthcare, and the like during a situation such as this. Many banks, government programs, and even landlords are looking at suspending payments for a set period of time to help those who are struggling.
- Productivity may actually increase. If there’s a silver lining to all of this, it’s that while memes about whether an interaction requires a meeting or an email are everywhere, the expected shift to remote work may actually increase productivity in the short term given the inability to convene in person. Meanwhile, improvements in data and digital should make it easier for consumers and even businesses and employees to self-serve, reducing the time between inquiry and answer the questions that they have.
Obviously, this is going to be uncomfortable for us as individuals, as organisations, and as an industry while we venture forth into this era of deep uncertainty. However, as with any crisis, we have always come out stronger on the other side. Personally, I look forward to seeing how financial services adapt to the COVID-19 age, and I hope that you do too. In the meantime, be safe, be well, and look out for one another.