How has COVID-19 become a wake-up call for financial services?
The COVID-19 crisis has been almost an instantaneous reveal of those institutions that had embraced digital transformation and those that only were presenting a pretty façade.
If your firm required the consumer to visit your branch office at any time during a ‘digital’ new account opening, you are hustling to build an end-to-end digital account opening process. This engagement needs to go beyond the changing of policies to no longer require a customer to present a physical ID to revamping the foundation of new account opening and onboarding to make the overall process seamless and well-designed from a UX perspective.
If your bank or credit union did not have an end-to-end digital loan application process, you probably were caught flat-footed when the government passed the SBA PPP loan package. Those institutions that had a completely digital lending process in place could take applications and process those applications in minutes. Those that decided to place digital lending further down the priority list may not have helped one of their small businesses.
Is your financial institution prepared?
Beyond just digital account opening or personal/small business digital lending, most organizations are not prepared for the ‘new reality’ that will occur post-COVID-19. Is your institution ready to communicate with each customer or member on a personalized basis reflecting their relationship? If a consumer wants to meet with a branch officer without coming into a branch, is your firm prepared to communicate via video the way the consumer has learned during the shelter at home period? And how far along is your organization regarding new forms of digital and biometric authentication and security The consumer will expect your organization to have answers?
One more immediate question – If one of your customers receives a government COVID-19 stimulus check, will they have immediate access to all of the funds, or will they only have access to the level of balances in their account. Just as importantly, if they receive the check in the mail and use mobile deposit capture to deposit the check, will the entire check be held for up to 10 days because of policies in place?
What does the new normal in banking look like?
The ‘new normal’ in banking will put an emphasis on digital transaction capabilities, personalized engagement, and a partnership for financial wellness. The consumer has been taught how to do all of their banking (grocery shopping, eating out, meeting friends, etc.) from their house. The vast majority will either take a very long time to revert back to how they banked before…or never will again.
Was their bank or credit union there when they needed a small business loan or when they overdrew their account? Trust and loyalty is not built when times are good. It is solidified when times are not as prosperous.
I want my financial institution to know me, look out for me, and reward me as I always have. The difference is that I am now more aware than ever what can be done. I will only partner with firms that actually can perform on those components of personalized engagement.
Financial advocacy is often preached, but where has it fallen short?
At the vast majority of traditional financial institutions, there has been close to zero financial advocacy on the consumer’s behalf. In those cases where products and services were developed that could help the consumer, these were often passively offered. The concept of ‘consumer experience’ usually was built around the requirement of cost savings or revenue enhancement. Mobile banking was built to save on transaction costs. Overdraft protection was created to generate fees. Providing alerts around low balances were left to the customer to set as opposed to being built with AI that could determine proactive warning levels on each day of the month. Going forward, especially knowing that the economic recovery will be longer than the medical recovery, those organizations that genuinely lookout for the consumer will be the winners…and there will be financial rewards for this positioning.
How has the current crisis impacted you personally?
Despite being a home-based worker before the crisis, I am still processing and pivoting because of the new reality. Gone (at least for now) are the global speaking engagements that provided me the unique opportunity to engage with banking executives from around the world, sharing my insights while learning how each banking organization and region of the world was different. In place of this globetrotting has been an amazing expansion of more direct engagements, including the development of white papers, the presentation of webinars, the expansion of my Banking Transformed podcast series, and more 1:1 meetings with people who have exciting ideas about the future.
On a personal level, as it has been with everyone, I have had the opportunity to spend more time with family and friends, finding unique and unexplored ways to connect and engage. We have also needed to adjust to unexpected disappointments, including the abrupt ending to my son’s senior year at college and the cancellation of his highly anticipated senior year of playing college lacrosse.
These disappointments, however, paled in comparison to the struggles many are having. From health and financial challenges to the mental strain that the events of the past month have brought, my family is very, very blessed.
Named as one of the most influential people in banking and a Top 5 Fintech Influencer to Follow, Jim Marous is an internationally recognized financial industry strategist, co-publisher of The Financial Brand, owner, and CEO of the Digital Banking Report and host of the top 5 banking podcast, Banking Transformed. Marous advises on all components of digital transformation within the financial services industry.