As the Rest of the World is Opening, What Does This Mean For Banks

Published On Great Lake Banker Review - May 2020

COVID-19 has taken the world by storm and continues to do so. While the virus is still something that is impacting...

By Arcady Lapiro 22 June 2020

As the Rest of the World is Opening,
What Does This Mean For Banks

COVID-19 has taken the world by storm and continues to do so. While the virus is still something that is impacting everyday life, many states have begun opening up and trying to get back to “normal.” While this is for the most part good news, there are still inhibitions from both businesses and consumers, especially banks.

Banks have been busy trying to figure out the logistics of opening after just recently reaching a level of comfort by conducting business outside of the walls of the branch. Hand sanitizing stations are being ordered, rules regarding number of customers and employees are being set and branches are getting ready for business yet again, but banking as we know it has seen a major adjustment.

Let’s break down lessons learned and how banks can ensure a successful return to business post COVID-19:

Customers also want to be in control of their banking experience. Banks need to provide consumers the ability to have unlimited access to their information, the option to adjust their approach to banking, as well as final say as to how their finances are managed.

How COVID-19 Took A Toll on Banking

As the world began to realize that the virus was more serious than originally projected and began closing many doors for the health and safety of employees and customers, banking executives hit the drawing board to make sure they conducted business normally without compromising the security or functionality for their customers.

For banks with full digital capabilities such as online and mobile banking, it was less of a learning curve. However, for those that didn’t have solutions already in place to digitize the banking experience for consumers, they were left scrambling to ensure their institution could remain afloat. All of this was done while ensuring customers had access to their money and small business customers had tools to manage their businesses.

Being that challenger banks are only digital, one would think they would thrive in this type of situation. However, consumers are not fully on board with testing the waters yet and are surely not looking to switch banks during uncertain times. In fact, many challenger banks are either doing significant layoffs, pulling business out of certain countries or closing completely. This is surprising during such a digitally driven time, but also speaks to the confidence consumers have in traditional banking and what they have to offer.

Building Your Digital Arsenal

This situation further exacerbates why completing a core conversion during this time is less than ideal. They take a lot of time and funds and are very difficult to navigate when branches are closed.

However, it is the perfect scenario to build onto your institution’s current offerings without interfering with the core.

BIncorporating digital capabilities like the ability to utilize a virtual card or manage current debit cards issues such as expiration or change of pin can be done within the solution. Banks are also seeing more of a need for instantaneous money movement like ACH and even peer-to-peer, which needs to be incorporated into digital solutions.

There has also been a rise in the need for money management for both youth and elderly bankers. Especially during a time where face-to-face time with elders is put to a halt, they still have their bills to pay and may need assistance which can be done from afar from family or caretakers with accounts tailored to elders. Teen accounts give young adults some financial freedom with oversight from their parents or guardians.

The overarching message throughout this circumstance is that there is a need for banks to add digital solutions. Those financial institutions without it have seen some difficulty with maintaining services for their customers. If banks digital solutions are not up to snuff, there is still hope by working alongside financial technology providers that work with the core to give capabilities that customers need to conduct their financial necessities, and also retain their peace of mind for safety.

About the Author:

Arcady Lapiro is founder and CEO of Agora Services, a Mastercard Start Path company that offers financial institutions a robust and customizable cloudbased offering that enables banking customers to create new banking products.

Published On Great Lakes Banker • May 2020

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