The sudden making of a pandemic from a seafood market in China has truly disrupted the world order, throwing countries and businesses into global disarray. Amidst all the helter-skelter, there’s hope and once we arise from this, there’s one group that can shed light at the end of the tunnel.
2020 has not started off great. Surely, there are better ways to start a new decade, rather than with a pandemic where lives and business alike are taking a massive hit. Industries have staggered to a halt, unemployment insurance claims has sky rocketed through the roof, some small businesses have had to look into their savings and liquidated assets, while others who rode on their liabilities haven’t been so lucky. Make no mistake; the damage by COVID-19 is not on human life alone, but on major economies across the globe. While the heroic doctors and medical professionals fight it out in the battlefield right now, the battle against recession is most likely to start right after all this. In this chaos, loss and disappointment, there is one group that can help people, businesses and everyone alike – BANKS.
Truly redefined customer experiences were always a target for banks to achieve in the past decade. Some achieved it, others did not. However, the past few months of lockdowns, no-fly zones and ‘stay at home’ orders have made a customer’s experience with the bank so much more important. Customers need to survive through the pandemic and afterwards as well and they can only do it with money, which makes ‘ease to bank’, ‘personal finance management’, ‘loan approvals’ and ‘recommended finance options’ all the more important. Right now, banks have everything to lose and so much more to win.
So what can a bank do?
Increase digital and remote banking consumption
The COVID-19 has attacked one more industry more than the others – travel & tourism. With the delayed lockdown measures and announcement by the WHO, the virus had already boarded flights, crossed borders and entered homes across the world. That proves one thing – customers are not going to be in a hurry to get back outside their homes, let alone their offices and client visits across the globe. There are certain elements of the digital banking that will be in high demand – personal budgeting, finance recommendations through complex algorithms, secure loan approvals within minutes to name a few. Through the heightening of digital and remote banking, customers can effectively restart their businesses on time, start planning their finances for the longer term and much more – all from the comfort of their homes.
Enable a digital banking model that aims at personalized finance & recommendations
The bursting of the US housing bubble and the global recession of 2008 should have taught customers about personal finance management. To some extent, it did; but more or less, it did not. However, customers won’t miss out on an opportunity, twice. Personal finance management tools and robo advisors are going to be raved out by the public and those banking solutions will cascade off the shelves in a faster fashion than any hi-tech gadget – and why shouldn’t they?
For example, in the United States, unprecedented, mammoth unemployment claims have come to light – 7 million in 2020, a number that since the 1960s had only breached the 200,000 mark. Moreover, since everyone is locked in and not having access to make a claim, this number is only going to rise. What will these guys want? – Personal Finance Management, so that they will never have to worry about a ‘no cash, no job’ situation and can plan their finances much better.
SMEs, at the same time, would be looking for reconsideration on their debts, until they can formulate some sort of strategy. One thing SMEs could use more than ever before would be financial advisories on the path forward.
Personalized finance tools, Recommendation and Financial Advisory tools are going to sell like hot cakes
It’s a Time of Cash Crunch! What can help?
Whether it’s Europe or US, Asia or Australia, almost every currency across the globe has taken a hit, which means value for each currency unit has fallen. Moreover, due to the rising job loss and inevitable inflation that’s going to burst on the scene, customers will be extremely anxious about such a situation and will be relatively thrifty in their spending. Banks by carefully analyzing their customers can win them over through the concept of personalized recommendations. By capturing customer spend data and merchant analytics, banks can understand customer preferences, likes or dislikes and much more. Using this data and GPS, banks can provide accurate personalized recommendations which matter to the customer at that particular time.
For example, imagine if the bank could send its valued customer a 50% discount coupon if they used a particular debit or credit card at a retailer like Macy’s or Marks and Spencers. Now, just suppose the customer was right in front of a Macy’s outlet. The bank has got a customer for life, and the customer’s lifetime value would increase significantly.
Advice for this season
According to McKinsey, half of US customers engage in digital banking infrequently or not at all. This is the market, banks can capture.
With the mandatory social distancing that has to be followed due to COVID 19, it is digital banking or nothing at all for banking transactions. This will greatly help banks to stabilize and strengthen their digital banking portfolio. Moreover, Banks should focus on a couple of things, which could probably set them up for the foreseeable future – a complete digital network, basing all decisions on data and analytics, ensuring budgeting tools and integrations with renowned third party fintechs which continue to amaze customers. This could enable banks to build a platform that enables finance management, quick and secure loan approvals, smart budgeting tools, personalized recommendations and much more – all of which the perfect digital solution can provide.
Banks are also facing the crunch at this time. With lower business, when compared to the standard and facing competition with non-financial entities like the GAFA (Google, Apple, Facebook, and Amazon) who are trying to enter the payments domain, banks need to work on impressing customers while maintaining their odds of surviving the recession in the long run. This begs for some major decisions to be made.
Banks need to put their money where it matters, go digital, use frameworks like imagyn.ai, which helps in capturing data from everything that’s available, churns the data and builds a sustainable model for the bank. Banks need to act smartly at this time, as it has positioned customers in a way, where they are second guessing every decision they make while having a hard time to trust anyone around them. That saviour for customers and businesses alike in this time of need and during this pandemic could be the banks.