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.
As more customers go online, bank's position at the crossroads of the customer and financial services is under threat. A crowded industry landscape is emerging, with various types of firms competing at various levels. Nonbank entities such as fintech's are making significant inroads in distribution, threatening to commoditize many banking products.
As a further reiteration, the article focuses on significant factors that the banking industry may realise the value of and further adopt to retain customer delight and loyalty.
Comprehending & Prioritising the Value Factors
* Re-Skilling the Workforce
Digital banking transformation and automation must be guided by a deeper understanding of how humans use technology. Factoring the principle of human experience in the design of systems becomes critical. Although digital banking improves efficiency and reduces costs but for the new system to work, we need to ensure that people are re- skilled to adapt to the new technological paradigm. An understanding of employee strengths and limitations amalgamated with the priority to augment human skills is essential for many banking tasks. As the banking workforce becomes more mobile, diverse, and dependent on technology, observing the buying behaviour of the customers requires constant learning, un-learning and, re-learning.
* Accelerating Digital Transformation
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