Serving customers in the age of COVID-19
We have been here before…
If closed schools and bolted shops sound familiar today, it was also the norm that gave rise to JD.com almost 16 years ago, then called JD Multimedia. What started out as a small chain of offline electronics shops selling disc drives and CD burners is now a Fortune Global 500, that counts Google as a significant investor. In a macro-economic environment with parallel challenges, business plummeted and all 12 of its physical locations closed. An online store was created, forming China's second-biggest eCommerce company, by goods sold, with over 350M active users in 2019.
Today's COVID-19 outbreak could be a needed trigger to push societies to digitise further, and the tremendous momentum of online businesses has once again surfaced. It is clear that after this pandemic, the vast majority of companies that have not been traditionally easy to move online will do so. These include grocery delivery, education platforms, remote working solutions, and the acceleration of 5G networks to support this growth.
However, what does it mean for the future of financial services in particular?
How should GCC banks be reacting?
Customer expectations have changed; banks have heard it for years, and nowhere will it be more real than in a post COVID-19 world. With every crisis, however unfortunate, there is an opportunity to turn things around and when it comes to banks, to cater to a more customer-centric world…so how should banks be reacting?
First, GCC banks have been on an uphill journey towards becoming default digital, mostly due to three key factors:
- A reluctance to adopt first principle thinking parameters;
- A cultural challenge to adapt risk assessment tools and processes which were relevant 20 years ago and partially applicable ten years ago;
- A lack of organisational digital maturity due to a lagging in the digital upskilling of the workforce.
Digitisation is not the responsibility of a digital team, the IT department, or a few senior sponsors; it needs to be part of a cultural DNA that exists in every employee. Why don't we use video connectivity to drive complex transactions at a time and location of convenience? Why shouldn't customer chats via WhatsApp be the equivalent to consent received over a recorded line?
Second, the GCC needs to accelerate its progress in creating a cashless society. It is evident that cash can not only be considered a customer-centric medium anymore. The Nordic nations have been at the forefront of this movement for many years and are an excellent case study; Sweden, for example, is considered to be the world’s first cashless society having created an efficient medium of exchange for legal tender.
Third, banking corporate hierarchies need to understand that their way of working and collaboration necessitates re-evaluation. The power of what partnership models can deliver should be brought into this ideation phase. There are lessons to be learned from startups and fintechs that may not be as strongly impacted in the COVID-19 world due to nimble culture that is focused on rapid client delivery and a model that caters to both impacts: site and personnel disruption. Large-scale hierarchies simply do not exist in startups and virtual ways of working have always been the norm.
A question to consider should be that once the investment is made, wouldn't it make sense to believe that workplace dynamics will change? Therefore, banks should consider this as a testing ground to draw conclusions for a futureproof cultural and organisational transformation.
We should not be here next time...
This pandemic has demonstrated a fundamental need for the digitizing and rethinking of traditional forms of banking. Furthermore, the demands of social distancing underscores the need for technology that better allows banks to interact from a distance. Adopting first principles thinking on the entire banking servicing model will serve as an economic shock absorber for both banks and society. It has long been argued that a continuum approach to transformative banking should not have to compete against other priorities. Hence, if there is one takeaway from the COVID-19 situation for those in the financial services sector, it is that the business as usual in terms of business models, financial investment, and resource deployment should never be the same again.
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