How COVID-19 is shaping the future of retail banking
This blog post is based on a webinar hosted by the Milken Institute that I had the pleasure of participating in. I encourage everyone to listen to it here, to hear my thoughts, as well as the valuable insights of my co-panelists.
Sometimes it takes a crisis to realize your potential, and the financial services industry has shown that to be true throughout the COVID-19 pandemic to date. Banks and credit unions have largely risen to the challenge and continue to serve their communities’ financial needs. But we are facing a very different future, and financial institutions must continue to adapt.
I’ve been proud to witness how Finastra evolved on the fly and adjusted to serve its customers. From an organizational and operational perspective, we were able to move our global workforce of nearly more than 9,000 from the office to the safety of their homes. As a global organization, this was something we were already used to; virtual collaboration is a way of life, and we had the necessary tools in place to continue business-as-usual. For our customers, the transition wasn’t necessarily so easy.
One of the challenges we were able to foresee was how our clients would meet the financial needs of their SME customers in a time of heightened demand when business as usual wasn’t an option. When the CARES Act went into effect, and the Paycheck Protection Program (PPP) was launched, we were able to develop a new virtual lending, compliance and origination portal, Fusion Small Business POS, within a week. We know how important financial institutions—and particularly local financial institutions—are to the communities they serve, so we made the solution available for free to Finastra clients and to banks and credit unions supporting minorities. This eased the burden of these banks and credit unions that needed to process an influx of loan requests quickly and efficiently to keep local business afloat, and local economies running.
Last week, I had the pleasure of participating in a webinar hosted by the Milken Institute: How COVID-19 is Shaping the Future of Retail Banking. We’re always honored to collaborate with them as their vision for how the finance industry could serve as a catalyst to improve society aligns with our own. Together with Mary Mack, Senior Executive Vice President and CEO of Consumer & Small Business Banking, Wells Fargo & Company, and Daniel Sheehan, Chairman and CEO, Professional Holding Corp and Professional Bank, we discussed—among other things—how this crisis is accelerating trends that were already impacting the retail banking industry.
One thing everyone agreed on was that the COVID-19 pandemic would hasten the urgency around digital banking technology. Overnight, financial institutions have had to figure out how to move the entirety of their branch environments to virtual environments, with some institutions leveraging creative ways to continue to service customers as best as possible (e.g. expansion of drive-through services). Some banks and credit unions have leveraged their digital banking capabilities to do more—from community-specific advertisements, to in-app messaging and promotions. We have seen institutions continue to focus on their community at hand through their digital tools. For some others, this has been a call to action to fix many of the customer-facing issues related to digital banking capabilities. Pretending to have a digital banking experience is no longer enough; now a true, robust digital banking experience is a must in order to continue to serve customers in the age of social distancing. And I don’t see these trends subsiding as life begins to return to what will surely be a new normal.
As parts of the economy start to reopen, I predict that those with digitized systems in place will continue to see the benefits from their ability to continue serving customers through web and mobile channels, and those with cloud solutions will continue to benefit from scalability.
Looking further into the future, beyond the pandemic, I expect financial institutions will have to continue to adapt and evolve to deal with changing circumstances. There will be a need for more digital transformation—the future is now and nobody can afford to wait any longer. Those that have already embraced fintech partnerships—often digital by nature—may find it easier to adapt. For others, macro changes may necessitate a technology audit, leading to the need to completely refresh technology or perhaps move systems into the cloud. For certain, innovation through technology can ensure that business, post-COVID, is full of possibility.