Where we can see the greatest effect of the crisis is in the habits and ways of behaving as a society, a society that will not be the same after the pandemic, and which is having a complete impact on commercial activity. In this setting, banking has also received a significant blow, despite managing to maintain a certain volume of business via digital channels. The financial sector continues to be essential for economic stability, as it provides the funds required so that both corporations and individuals can keep functioning. And, as pointed out by the analyst firm International Data Corporation (IDC), credit restrictions and the shutdown of economic activity will undoubtedly impact its business.
From an economic viewpoint, we will be facing a new recession and, as IDC states, there will be governments that have to seek a balance between its citizens’ health and its own economic stability and debt.
However, the pandemic has favored the rapid-fire implementation of the new “remote” working style – teleworking or telecommuting – which has benefited the telecom industry. Many of the digital services that are being deployed will end up becoming well-established, such as the public e-administration and even health supervision and control. All of this will be boosted by accelerating the pace of 5G implementation and the need to respond to the growing demand for online services.
The today and tomorrow for banking
Interpersonal distancing and the boom in online procedures are leading to a drop in people going into bank branches, which could lead to a large decrease in the number of these spaces. The banks that survive will need to transform and offer a space that highlights different values, focusing on a new user experience revolving around personalized services.
The present health and economic crises are also affecting banking on several fronts, including minimal shares in securities, direct initial losses due to the government-decreed suspension of loan and mortgage payments, low interest rates for a longer period of time as a stimulus measure by the Spanish central bank (BCE) and lack of creditworthiness stemming from the possible scenario of recession and unemployment. All of these factors could lead to speeding up some of the mergers that have been in the making in the sector.
But it’s not all negative. The huge increase in digital transactions, and greater financing demands from companies and the self-employed will also offer new opportunities to maximize adopting remote management services for end customers less open to change. Now is the time to put new relationship models with account managers into
practice that could become mainstream. These include instant messaging services, social media, video calls and cobrowsing. It could even represent the beginning of the incorporation of virtual assistants and virtual-reality meetings that will arrive hand-in-hand with the maturing of new technologies like Voice Tech and 5G.
Present-day circumstances are also opening up a wide range of possibilities for the world of payments. The increase in online services, including physical stores, the rise in mobile payments and the use of contactless devices, which all avoid using physical money and touching businesses’ sales terminals are now so widespread that we may be wondering: could this biological crisis accelerate the disappearance of cash? It will definitely not totally eliminate money and neither do we believe that it will reach the level of countries like Sweden. However, what is true is that a definitive leap toward digital transactions has occurred, with the consequent and considerable drop in the use of cash for everyday payments.
Security and fraud prevention are also forecast as a core area for this new financial relational model. The increase in connections by non-customary clients and employees (not always used to digital operations or teleworking) gives cybercriminals added opportunities and increases the difficulties of identifying security and fraud prevention risks. Multifactor authentication systems (based on face and voice biometrics) and solutions that can create behavioral models to detect fraud and analyze the risk of every transaction will end up becoming essential for organizations to run well.
In parallel, the need to maintain homogeneous security systems across all services and encouraging teleworking and telecommuting will drive financial organizations toward adopting cloud solutions, which are more flexible and scalable and prevent dependence on physical infrastructures.
In general terms, we are facing a panorama of great uncertainty that will alter society, and the needs and method with which financial institutions and companies will deal with this new reality. The challenges are significant, but digital mechanisms and driving forward new relational channels for both customers and employees will be essential to successfully confront and adapt to this new social environment.