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Innovation, changing behaviours and accelerated growth: the transformation of the banking sector

In June, Enate sponsored new virtual event, the Retail Banking International Conference. With a strapline of ‘enjoy the virtual experience from your very own home’, it was going to be interesting to hear insights into how the previously office-reliant sector is managing the currently uncertain financial landscape and working from home. Here are some of our event takeaways.

What struck us most about the event was the positivity around accelerated change. And the stats and subsequent innovation that came with it.

In ‘Banking for a Changing World’, speaker Robert Johnston of Enterprise Software Solutions gave us an insight into pandemic-effected-changes, and how the sector is working to keep up with them.

For many of us no longer willing to handle cold, hard cash, it was little surprise to discover that cashpoints are now used around 70% less than prior to the pandemic, and instead digital, or online, banking has become the ‘self-service’ focus. This adoption by new users comes via a report from FIS confirming a 200% jump in new mobile banking registrations and an 85% increase in traffic in April. Those who may have been fearful of this new tech were now ready to brave the new world of online banking and it is doubtful that any will look back. A behaviour that can often be the case when it comes to new technology; the plunge may have been unexpected but the user-experience is easy to adapt to as ‘usefulness’, ‘control’ and ‘convenience’ take charge of the know-how.

This does not mean the ATM has been left behind, however. The ATM is now being redeveloped as a an ‘ITM’ (Interactive Teller Machine), a communal point to access a range of new digital services, rather than just a point to withdraw cash. The ITM will offer video assisted services (some are already deployed in the States and Middle East), and the scheme is likely to roll out in the UK in the ‘near future’, complete with antimicrobial coatings which will protect the unit for many months, providing an interim solution while the concept of ‘touchless’ self-service gains speed. The future, Robert confirmed, will see new self-service architecture developed alongside the ‘digital first’ consumption model.

Hugo Assagra, Head of Portfolio Risk, Bank of Ireland talked more about this while he focused on how the sector innovates its way out of tragedy. Hugo feels that, out of adversity will come more innovation and opportunity. Along with the example outlined above, retail will also continue to change for consumers and the industry as a whole, from the increase in contactless purchase limits to fraud, to the way in which workers interact with customers. Simply put, the old models don’t work anymore, but are we ready for the new ones? Something tells me we will adapt, and quickly.

Within the banking sector, there is an acknowledgement of a natural human resistance to the working-from-home mindset. Although the plans to return are underway for many, with experts considering safety implications and changes to how the office will be laid out including removing communal areas, all of this still needs human resilience. One message that is being reiterated across all sectors is that mental health is now even more important than it was before the pandemic.

Of course, part of the mental health story is also debt crisis. This was discussed by Bruce Curry, Vice President Collections and Recovery Solutions, of FICO. COVID-19 challenges continue to put pressure on consumers’ ability to repay loans, which in turn creates pressure within collections departments and debt collection agencies. Handling this spike using the traditional approach is a recipe for disaster. The new normal allows for a new mindset, and for the sector to not consider these as ‘bad customers’, they are simply victims of the pandemic, and to mismanage this customer base, under these circumstances, rather than work to retain them through the difficulties, would be short-sighted. Moving forward and with much uncertainty ahead of us as we return to work, or face local lockdowns, it remains that additional data needs to be captured to determine ‘Good Debtors vs Bad Debtors’, but how is this captured, and how is this going to be processed to make quick decisions? The sector was deluged by requests for mortgage holidays in March and April, with the sector managing sheer volume with less staff has seen some changes made, in a very short time, over how mortgage holiday extensions are applied for, often now via an online portal and with no damage to the account holders credit rating. The service had to expand to react quickly to prevent customers falling into arrears and collect relevant data en route. As a result, data can now be captured from customers engaging with the sector via additional sources, including auto voice iSMS, WhatsApp, Digital Direct API, email, portals, eDocs, and all of this information can be used to create new processes better able to support ‘economic victims’.

Although the pandemic has certainly accelerated some areas of growth in traditional arenas, the growth of Open Banking since 2018 is also having a significant impact on change. Ed Adshead Grand, General Manager of Bottomline approached the topic of ‘Open Banking’.

Open Banking was a fallout of the 2008 global financial crisis. A lack of competition led to a review of regulations from which the concept was born, resulting in consumer financial data being released from banks and back into the hands of the consumers - who are now able to manage bank accounts via third party intuitive interfaces as opposed to (or in addition to) directly via the bank. What this also means is that it not only relieves the governance the banks held, but the ‘third party’ is now able to offer new products and services to consumers (like a ‘switching service’, or insights into how we are managing our personal spending, for example). Banks can now partner with providers to increase customer loyalty giving them an entirely new target audience. There are also new options for more digitally-savvy consumers to select a ‘challenger bank’ model instead of the traditional High Street version as both can now equally compete in the Open Banking model. Once again proving the adage of ‘out of adversity comes opportunity’.

We realise that business has changed progressively and globally, fast, and we also understand that it is not simply the bottom line that needs attention, it is a new ‘disaster recovery’ in real-time, and a greater focus on mental health support, helping the workforce manage their new ‘boundaryless’ environment, while keeping customers happy. And time is of the essence, so finding a solution that takes a few weeks to implement and get up and running is more important than ever.

Not only can Enate support your digital transformation via our service orchestration platform, we can keep your legacy systems in place, your workforce happy and the customers at the heart of what you do. Find out more and get in touch with the team at enate.net. We are here to support any business considering new technology to improve the customer experience and help you navigate the new normal.

To find out more about boundaryless working, sign up to our FREE webinar, 'Achieving boundaryless working in the new normal', taking place on Tuesday 14th July, 4pm BST, with leading analyst firm HFS and experts from TMF Group and Zurich Insurance. We hope to see you there!  


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