There is no doubt that 2020 has been a challenging year for all, and the true impact and consequences of what is happening have yet to be understood.
The financial services industry has had a pivotal part to play during this period as they deliver on expectations to provide financial support structures for other industries as well as significant government support. But the industry itself has not been immune from a direct impact from the pandemic. In fact, a recent survey by TheFinanser.com found that over 70% of respondents in the Financial Services industry had issues coping with the pandemic.
A key effect has been the immediate and sudden demand for Financial Services to change the way they do business, with 42.62% admitting they had changed their strategy permanently. From providing a continuous service for customers to supporting the remote nature in the back office, the pandemic has also accelerated many of the strategic plans and ideas that financial services organisations were considering for some time anyway, leading to a number of headlines over the last few months on branch closures, mergers, reprioritisation of resources to other areas of the business, employee numbers, risk and security, and much more.
This acceleration has not been on operational matters alone. A clear change in customers behaviours has also happened, with more Financial Services customers engaging with through digital channels with Banks like Santander, BBVA, BNP Paribas, HSBC and more all publicly reporting significant increases in their digital engagements and app usage.
The forced closures of branches and face to face relationships has certainly accelerated this move across all generations to a digital omnichannel journey. What is interesting is the potential longevity in these changes. McKinsey & Company reports in their ‘Financial life during the COVID-19 pandemic – update’ (June, 2020) this paradigm shift is happening across all demographics not just the millennials; and, significantly, many of these demographics will be happy to prioritise mobile and online banking going forward.
Many in the Financial Services industry – 47.73% from TheFinanser.com survey - believe this behavioural shift from physical to digital is here to stay, with nearly 30% of respondents changing their view on what the physical versus digital would look like.
Chris Skinner, founder of TheFinanser.com, believes that this accelerated bias towards digital has given rise to what he calls ‘omniaccess’ – arising from the ashes of the 2010’s omnichannel experiences. He believes that channels were derived from old infrastructures. This, he says, has developed to omniaccess to a common data core, shared by all. Nothing to do with adding extra channels to an old, fragmented system. Instead he is inferring a flexible, accessible digital core which customers can access at any time in whichever way they wish to – both with what exists today, and what might be introduced as customer channels in the future.
We are already seeing innovations in the industry supporting this vision. For example, in Financial Services, the increasing adoption of Digital Assistants across customer and employee journeys are providing intelligent conversational interfaces created for a human experience. Accessible as standalones, or through tools used everyday (WhatsApp, for example), the Digital Assistant learns how to become that omniaccess to the organisational core – whether it be Finance, HR or Customer Lines of Business.
AI is also empowering what is possible, automating many processes and driving unbiased decisions, making the idea of real-time omniaccess to a digital core increasingly realistic.
Of course this would need much more, including agility, a single source of truth, automated and intelligent processes, a secure and scalable environment and so on. So, if this shift is to be the digitalisation of journeys framed by a post COVID-19 world we have to ask if the Financial Services Industry is ready for it?
TheFinanser.com survey suggests that many are considering the future with 50% of respondents saying they are focusing on technologies such as Cloud, AI, APIs and Mobile; and 65.7% of respondents admitting they had challenges with their technology structure during the pandemic.
What is clear is that the banks customer and employee relationships are going to develop into something very different quickly, leading me to think that the 47.47% respondents who thought everything would get back to normal within the next 12 months are thinking of a very different normal.
You can download the report here.