Retail Banking Post Pandemic: Repositioning & Recalibrating For The Present & Future

The COVID-19 pandemic has brought economies to a standstill and has provided considerable challenges to banking and financial institutions. However, the banking industry has shown tremendous alacrity during the ongoing pandemic.

- Mukti Prakash Behera

Introduction

To give an example, bank branches were closed when clients stayed at home, redirecting their resources and customers to digital channels. Banks extended loan deferrals or moratoriums to help financially distressed customers weather the crisis.

As the knock-out effect of the pandemic spreads, the domain of retail banking juggles to reposition and recalibrate the business priorities and customer expectations. The banks realise today that the product, process and experience delivered to customers needs re-orientation. With social distancing norms still in force, re-orienting the digital banking approach is a primary agenda for the industry.

The article endeavours to analyse critical value factors relevant to the banking industry to stay relevant now and rise above in the future.

Challenges for Retail Banks

Banks now confront additional hurdles as the new reality begins to take shape. The pandemic has accelerated changes already underway and sparked new ones. Owing to the pandemic, the banking revenue has taken a significant beating, and the industry's revenue pool is under pressure. Relevant reports suggest under the most optimistic scenario; those pools are not expected to return to pre-crisis levels until 2022.

Customers are making a move to the digital channels faster than they have earlier. Online banking and mobile banking use has increased to a considerable level. These changes are expected to last, speeding up the transition to digital media by three to four years compared to pre-crisis trends.