The lockdown to prevent the spread of the coronavirus, while necessary, has impacted industries across the board. Travel, restaurants, luxury and fashion, amongst others, have taken a huge hit. And banks are no exception. How banks respond to the current situation will go a long way in rebuilding trust with their customers and make them dependable pillars of the global economy.
So, what should banks be doing during the lockdown?
Let’s look at it from three important perspectives :
3. Operations and processes
Bring out the empathy
In a situation that is rife with fear and insecurities, banks need to understand customer concerns and gain their trust. Customers find it difficult to go about their day-to-day, essential transactions due to the lockdown. Confined to their homes, they are spending most of their time online.
Not surprisingly, this has led to a spike in online banking. In China and Italy, for example, four weeks after the coronavirus outbreak, customer digital engagement increased by 10% – 20%. Another study conducted among Indian consumers revealed that 47% of Indians are more stressed out, when pre-COVID that number was at 39%.
It’s also interesting to note, there are also more people concerned about the disruption to life caused by the virus (45%) than about their health (31%). Which means, this is an opportunity for banks to find ways to make things easier for their customers and to launch a customer-first digital strategy.
The need of the hour is to educate customers on how to use their digital tools to conduct their transactions online and assuage their security concerns. Remove all potential barriers for online transactions to provide seamless online experience to their customers. For example, banks can increase the cap on online money transfers and provide relevant communication.
Additionally, banks should proactively understand their customers’ needs and facilitate the same, rather than push one-size-fits-all products to them. For example, help those customers in financial need by waiving off interest for a specific time or extend the moratorium period.
It is also a good time to understand what their customers really want, and provide relevant offers on digital apps, such as video or music streaming apps.
Take care of employee well-being
Banks need to take all the necessary steps to ensure that their employees’ health (both physical and emotional) are not compromised.
For employees required to be present at the branch, create stringent health protocols. Including regularly disinfecting the office premises and providing essentials like hand sanitizers, masks and gloves to employees.
Besides ensuring their physical safety, banks should also take additional steps to boost employee morale. Acknowledge the risks and appreciate the tasks that the employees are doing to ensure business continuity. For those working remotely, ensure regular check-ins, daily goal settings and virtual chat rooms to ensure both productivity and employee engagement.
Additionally, banks can also create an appointment-based system for customers to visit the physical bank branches. They can then use the information, create a dashboard for their employees to stay updated on in-coming customer traffic, and prepare accordingly. This will help both employees and customers and ensure a hassle-free experience.
Boost business operations and processes
Every major crisis presents an opportunity to overhaul the system and replace inefficient legacy processes with streamlined ones that help reap rewards over time. History is replete with such instances – the 2008 crisis led to the overhauling of the regulatory framework that oversees banking.
The 9/11 incident changed the way security measures are taken globally to safeguard civilians. Apple’s brush with near bankruptcy brought back Steve Jobs, eventually leading to a shift in product focus and a resurgence that is now etched in Silicon Valley history.
Banks need to use this crisis to revamp their operational processes to stay abreast with the change in customer behavior and requirement so that when the crisis gets over, they can come out on top.
An integrated digital strategy can help remove operational redundancies and improve agility. Increasing digital customer engagement will also help banks reorient from a reactive service provider model to a proactive relationship management model.
It is also a good time now, to re-imagine their product portfolio – look for ways to disburse loans to industries most severely impacted by the current crisis, provide easy loan restructuring and more.
Stay relevant in trying times
The housing market collapse in 2008 was the last major economic crisis that impacted the world. Banks were largely held responsible for triggering that collapse. This crisis presents an opportunity for banks. To overhaul their public perception, lead by example, and provide appropriate relevant solutions to this crisis.
In short, banks need to be the pillars of the financial industry, for the economy, and their customers. Those who are cognizant of this, will emerge ahead of the rest of the pack on the other side of this crisis.