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How is Banking Changing with COVID-19?

How is Banking Changing with COVID-19?

Although the global outbreak of COVID-19 has forced several precautionary measures like country lockdowns and self-isolation on most of the world’s population, there is one thing in the financial world that is certain: the industry is experiencing an unparalleled growth after Coronavirus struck. This growth had led to several plans for the future in terms of banking models and innovation, so looking at the current period begs the question: is the plan of the finance industry the same or has it adapted to the pandemic?

Pre-Coronavirus, the outlook of the industry was mainly the disruptive nature of technology in finance, with FinTech leading the way to a more-likely-than-not fully digitized future. Today, FIs ought to put this friction behind and explore the potential of partnerships, mergers or acquisitions with FinTech companies, in order to cater to their customers in a period that mostly promotes digital-only interactions.

This level of disruption can hardly be planned for, especially in such an unexpected time frame. Therefore, adaptability is key during the global COVID-19 crisis and solidarity in the form of mutually beneficial partnerships during tough times is the way to go if you wish to pass this period with minimum damage. Today, brick-and-mortar financial institutions are changing the way they conduct business, as employees and consumers alike join them and give in to this demanding situation by changing their behavior as well.

Innovation is now

As social distancing continues and people turn to digital banking for their daily needs, the institutions and companies that have previously invested in innovation and digital transformation concepts can greatly leverage their experience today amidst the crisis.

Business that previously were skeptical about innovative technologies and breaking new grounds are now reconsidering their choices and adopting the idea that innovation is a must, not a plus. It has become evident that now is the perfect time to push for innovation and discovering new, easier, better methods of doing business. Organizations should not slack on their efforts to bring new solutions, but should double down on those efforts. Entrepreneurial spirits are needed, and even if financial institutions lack the time or resources to launch an innovative idea, it might still be viable to create a product and try it out with minimal resources, because uncertain times call for any one thing that can bring certainty, no matter how little.

Nowadays there is a lot of talk on transformation efforts, but it should essentially mean more than just cutting costs and trying to reduce the economic impact of the times. Proper and planned transformation will be very beneficial post-Coronavirus as well, because the finance world will emerge from this challenge with new and resilient business models built on the pillars of innovation.

A Meaningful Shift in Marketing

If Marketing as a profession was considered both art and science, it is now in the process of becoming almost all science. With the increasing use of next-gen technologies like Artificial Intelligence (AI) and Machine Learning (ML), marketing as a practice is seeing more and more models that are structured on AI-based data gathering processes. So how can this level of automation change to accommodate an economic crisis of pandemic proportions?

Marketing is primarily a communication medium, and in times of uncertainty there is an innate need to be consoled and reassured; it can be leveraged to alleviate the concerns of consumers in terms of their finances and similar matters. Speed, tone, clarity and reliability of communication and level of engagement are critical needs during the Coronavirus period.

Reaching out to consumers and helping them understand how they can access their finances through different solutions is a must to retain their trust. Banks should educate and engage with their customers, providing them with support on different levels through several channels. Here AI can come in handy, in the form of Chatbots for instance, where basic (and currently even moderately hard) questions are quickly and efficiently answered by AI through text messaging in real-time.

Personalized services have demonstrated their appeal over time, and marketing at scale is going towards providing a 360-degrees approach to satisfying customers of all types; from the elderly to small business owners and beyond. It’s a two-fold personalization scenario; marketers need to understand the customers’ needs but also reach out and be there for them on an individual basis. Doing right by customers is the right thing to do, and they will remember these times when it’s all over which ultimately will lead to more business and deserved loyalty.

In that same regard, there is great potential for content marketing; not the promotional kind, but rather the educational and informative type that works towards keeping consumers aware and connected to solutions that ease their navigation through this crisis.

 

Coronavirus or not, the main focus of the financial industry remains the same; the customer. People behave in certain ways and adapt to their environment and its variations, and successful financial institutions are the ones that adapt to their customers’ needs as they change. During the ongoing COVID-19 situation, it is evident that the FinTech branch of Finance will take the lead and navigate an anxious population through rough waters, and potentially beyond that. 

 

Tags

Coronavirus, COVID-19, innovation, digital finance, marketing, communication, disruption, chatbots, Artificial Intelligence, AI, Machine Learning, ML, automation, personalization, banking, digital banking

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