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COVID-19 has brought forth challenges and pushed banks to rethink their strategies to fit the evolving industry landscape. Post–COVID-19, the years ahead will bring in a range of opportunities and trends for banks. Banks will require agility to meet the growing expectations and make the most of the new possibilities in financial services.
From ensuring customers’ expectations are met, there is 24/7 service, transforming traditional lending and basic banking processes to using advanced predictive analytics and ensuring the resilience of financial systems.
The possibilities for digitization in banks post COVID-19 era are:
Rise of new age banks – Across the globe there is a rising number of new entrants in the banking landscape that include a mix of challenger banks, mobile banks, neobanks, and digital banks, all of which are redefining the way banks function and customers interact.
Crisis banking – The amount of write-offs has been steadily increasing as the banking markets gear up to bear the brunt of COVID-19 on their customers. Quite a few banks have also increased their lending limits as the pandemic eases up.
Crisis recovery lending – The general trend across the markets has shown a high risk aversion and so in order to mitigate this, banks have made their credit decision processes far more tighter.
Personalization – Hyper-personalization is the buzzword that is going to help banks grow their customer base and offer high levels of customer experience as well. This is one way for banks to stay ahead of the curve and fight competition.
Digital Channels – New range of digital platforms, connected wearables and biometric channels will soon become the norm. Banks also leverage on the existing mobile and Internet channels. Banks will adopt an omnichannel approach to ensure customers receive seamless service.
Payments – Digital banking has paved the way for speed and instant transactions. Infact, quite a few banks have also included Crypto and exotic payment types as the markets evolve.
Ecosystem – Banks remain central in digital platforms because they have an extensive, trusted relationship with customers.
Regulation & Compliance – Regulators support innovation, which increases speed to market.
Apart from these, there are three key drivers that the world of banking will see in 2021 and beyond. Core banking systems will have a major impact on the bank’s ability to be agile and adapt thereby sustaining in the long run.
Hyper-Personalized Services – With the entire business shifting to a customer centric one, there no longer exists the “mass market” segments. Banking has become all about the individual customers, bankers are creating one on one services and therefore there is a likely shift in the entire culture of the banks and how they function. They will put the customer experience above all else.
Agile – Research studies have estimated that banks will witness a phenomenal increase in change [300–500%], and delivery of new products and services within a short span of time as against the months it took earlier. The priority will be speed to market, continuous development and deployment and governance for IT change.
Ultra-Lean – All banks will soon move to cloud and cloud-native based solutions or they might not survive the days to come. Banking services are looking to shift from cost center to a revenue enhancer.
Challenges faced by banks under each of these three drivers:
Most of the features available within the core banking systems have provision for change, but the extent of change and ease of adaptability is what makes the difference. However, banks need to work towards adapting to the changing landscape and the shift needs to happen top level all the way to the lowest level. The need for modernising core banking systems is a key necessity.
Configuration and composability is at the crux:
Composable Banking Platform is the new age banking system that is gaining popularity. It is all about self-service discovery, and creation of new banking services by ecosystems inside and outside the bank. To build agility, and constantly improve banking services, it is all about what can be configured and what is composed.
At Neutrinos, we offer customer-focused digital banking solutions to forge stronger relationships. Some of the features of Neutrinos Solutions are:
We are a company offering low code in banking solutions along with being an omni channel banking platform. All solutions are all customer centric and ensure you offer the highest level of customer experience.To understand how you can achieve digital transformation in the banking sector, reach out to us now.