As banks, like most businesses, are cutting costs in the face of COVID. Where does that leave digital banking and innovation projects?
Digital transformation was a major initiative for many banks before the new coronavirus pandemic arrived. Many institutions had committed to changing their business structure to thrive in a digital world. But the global crisis is forcing companies to rethink investments of all kinds.
Amid the pandemic, remote tools and solutions that allow you to continue with daily activities without leaving home have grown in popularity. New ways of remote workingas well as new e-commerce offerings from stores and supermarkets are quickly taking hold.
Yet banks, for their part, still restrict many products and services to in-person offerings. This has meant that, despite extensive stay-at-home orders, countless brick-and-mortar branches continue opening their doors.
Digital banking: Changing in a crisis
Since the COVID-19 pandemic spread, many banks have taken the initiative to communicate carefully, and calmly, with their clients, especially those using products where the outlook is less certain for all parties – such as loans.
That effective communication strategy may have been enough to manage immediate financial stress – but as time passes there are many gaps that banks simply can’t fill this way. That means that digital transformation is no longer an important trend: it has become a necessity.
Over the years we have seen the emergence of collaborative development environments within banks. These bring together analysts, programmers, designers and engineers, thereby closing the gaps between technological innovation and the business side of a bank.
Some institutions invested in digital innovation long before the emergence of COVID-19 and today they have the opportunity to further enhance the user experience and take advantage of digital products. Others hadn’t already advanced on the road to digital quite so far and now, amid the global pandemic, need to catch up.
Among the big problems that traditional banks may face – as we all navigate through today’s uncertain waters – are payment methods, because many of these are physical, either in cash or through cards. This is a complex issue.
“Any company that wants to provide its services needs to have a way to charge remotely and this is key,” emphasizes Marcelo Fondacaro, COO of VeriTran.
The digital transformation environment
It’s clear that today, offering remote solutions is essential for business continuity. These short-term demands are forcing us to think even more about digital transformation as a quick way out of the crisis, even without a long-term strategic action plan.
There are some quick wins that banks can start with. Among these are implementing digital KYC (knowing your customer) tools and a digital onboarding process, which allows for new users to be identified and authenticated quickly, without needing to come into a branch.
Despite this, there is a risk that, after the dramatic experience, the traditional processes will resume.
“A two-year project delivery timeline is not workable in today’s environment. These projects have to be deliverable, planned and short,” says Fondacaro. “In a very fast time frame – within a few months – you have to offer functionalities and then gradually add others that may be more complex or less-used, and that way you can successfully achieve a long-term project.”