The impacts of the pandemic on the economy and organizations are getting bigger every single day. The banking industry had already got into a deep restructuring with the financial crisis in 2008. The current economic situation is unlike anything seen before. Therefore, it is expected that there will be such a long and a difficult recovery period in the post-pandemic era for the future of banking.
On the other hand, companies that are rapidly triggered while going through such challenging and evolutionary stages and approach with the right vision and strategy always gain a great competitive advantage and emerge much stronger than ever before.
The Pandemic Effect in Banking Industry
It’s a fact that from the first day of the pandemic has created extraordinary conditions in our daily lives. With the unusual health regulations, the overwhelming uncertainty, and the lockdowns there has been a sudden shift in the sentiment. Therefore, the behavior of each individual and almost all industries have been deeply affected by this situation.
Consumers’ concerns, priorities, preferences, and of course, behaviors have changed a major shift in the blink of an eye. No one wants to go into shops, supermarkets or banks physically anymore. Customers are more willing to use digital banking and online financial services. BCG’s Global Retail Banking 2021 report shows that online banking usage increased by 23% and mobile banking usage increased by 30% during this period.
According to the McKinsey Consumer Pulse Survey on the pandemic (conducted in mid-April in France, Germany, Italy, Spain, Sweden and the UK) digital engagement levels among European customers have increased by 20%. 30-40% of customers have expressed that they needed more advice. 20-40% of the others request products to aid them through this crisis.
In short, the pandemic era has intensified the wind of change which has already accelerated with digitalization in the last decade, and the understanding of digital banking has taken on a whole new dimension as a consequence of the lockdowns and health regulations during the pandemic.
The Great Shift in Digital Banking Approach
As we’ve mentioned before, there has been a massive change in customer behaviors. Considering that even the basic daily routines have become a part of the digital world, the major change in customer expectations cannot be ignored. This will undoubtedly bring about the need for a digital experience that is as fast as the speed of light but balanced enough to meet and satisfy all customer needs.
On the other hand, it should be considered that now the bank employees who will be building and delivering this flawless customer experience are also working remotely through digital screens. At the same time, it is clear that banks will need to set up much more cost-effective workflows in the economic contraction due to the pandemic.
Thus, while focusing in digital banking was intensively on digitalization in customer experience processes in the pre-pandemic era, now there is the need for a much more interlaced digital experience and process design embracing all areas of banking business and services.
In brief, digital banking now proceeds from two main branches supporting each other which includes the business processes standing at the back-end to ensure cost efficiency and the seamless flow of customer experience on the front-end.
Post-Pandemic Digital Banking Business Processes Overview
It has become extremely important today that banks and financial service providers have the ability to create front-to-back digital value. When banks automate and streamline their back-office operations with digital services, their daily workflow speeds up, and makes it much more efficient. These arrangements eliminate human errors, follow-up issues, possible poor communication and inconsistencies while creating a much more impeccable process and experience for both employees and customers.
According to BCG’s report, the operating costs of the best banks are already about 40% lower than those of atypical bank, and they have roughly 50% fewer employees. However, automation through digital banking is much more than just a cost-saving investment. In general, digitalization provides automation, improved customer experience, and cost management to financial institutions. It would be right for banks to perceive this investment as a strategic breakthrough that not only disburdens internal processes and workforce but also maintains the agility and flexibility necessary to provide the most efficient customer service.
Banks can set much more assertive targets by using end-to-end metrics obtained through digitalized business processes. The digitalization of internal processes simplifies work and eliminates rework, as it also optimizes cross-departmental functions and processes.
Post-Pandemic Digital Banking Customer Experience Overview
Customers are more demanding now. As they adapt to the digital world, they have become more aware of alternatives, and they have the ability to easily use many services that banks have previously offered. Therefore, creating customer satisfaction and converting them into loyal customers are more challenging than before for financial service providers.
While customers used to be passive and felt obliged to be content with the value given, they have become much more active in the post-pandemic period, and each of them has become a value creator. Today what they seek is a much more immersive experience.
Understanding the radical change in customer behavior is important in order to be able to develop efficient strategies and meet customers’ expectations. Digital banking customers are now more connecting and demanding than ever before. They are also quite challenging because they are researching and comparing in more depth.
Although it may seem a bit complicated at first glance, the only thing they are searching for simplicity. They have a problem that needs to be solved and they require the simplest way to do so.
At this point, it is extremely important in digital banking to have the flexibility and agility to instantly notice that new and trending customer expectations rapidly offer tangible solutions that can respond to their needs.
As a result of all the transformation experienced after the pandemic, all banks will be reshaping their cultures. There is a rapid transition from a control-oriented structure to a more agile culture supported by tools that provide smarter control.
These days while consumer needs are changing at the speed of light, it will be very important to create flexible banking structures that are more open to technology and innovation in order to stay relevant and beat off stiff competition.