Global concerns about the Coronavirus (Covid-19) pandemic continue to rise, as we now face an escalating health crisis.
Many of us in self-quarantine, waiting for this unprecedented storm to finally calm and pass, have to reflect on the negative economic impact all this will have. Everyone will be affected in one way or another and that’s a hard truth to swallow.
Economically speaking, it could be disastrous as a full-fledged recession looms and uncertainty has now become the new norm. Some analysts predict that the crisis caused by the spread of the coronavirus will be worse than the global financial crisis of 2008.
Many industries are being affected by this pandemic, some harder than others. Airline, leisure, and travel companies have been some of the most vulnerable. Government bailouts are in the works to help ease the suffering and to help pump life back into the financial systems that are the lifelines of the global economy.
With troubling times come challenges and opportunities.
Some businesses will have to to embrace digital technologies to maintain operational efficiency as countries go into lockdown and compelling many people to keep socially distant and work from home. As a result, the digital infrastructures we have in place now will become crucial, and more depended on, in our everyday lives.
Companies are waking up to the reality that business will become more difficult. As countermeasures, some companies are investing more in technology and processes that will transform their way of working and quite possibly redefining their own business models. This could help save and navigate them through the rough waters ahead.
Necessary Shift for Banks and Financial Services
When it comes to banking and financial services companies, they too are feeling the pain from the current Coronavirus pandemic, internally and externally. Many banks will play an important role in this as they will be needed to stabilize the system for their customers, their employees, and for the economy.
And those that in recent years have been undergoing digital transformation and scrambling to adopt new technologies and services throughout the company are now forced to accelerate that development and deployment. These reactionary measures, which before had a lot to do with cost reductions, are now necessary for survival as they coincide with a crisis that is radically changing consumer behavior, pushing many to take all their banking needs online.
Today, retail banks, both locally and nationwide, are taking measures to decrease the amount of foot traffic to their branches with the aim of slowing the spread of the virus. Take Chase, for example. They are planning to temporarily close a fifth of their branches (roughly 1,000), to protect employees and customers. An inconvenient as this seems, however, this is an opportunity for banks to show their range of digital banking options and aim to improve services that are currently not set up to operate remotely.
Mobile Money over Hard Cash
The World Health Organization has advised people to stop using banknotes and instead switch to contactless payments and other systems to help the Coronavirus from spreading.
With this in mind, perhaps it's the moment to implement new initiatives around cashless services and products that will help curtail the growth of the pandemic and cater to customers’ demands. It would be a win-win.
One noteworthy example of this is M-Pesa, East Africa’s leading mobile-money product, which will implement a fee-waiver to reduce the physical exchange of currency in response to the COVID-19 outbreak.
Many other banks are working hard at adjusting to the unprecedented situation and “banking” on their own digital competencies, channels, products, and services, to remain accessible and competitive.
FinTechs at the Forefront
Along with banking and financial services firms, FinTech companies are also finding opportunities to make an impact. They have been coming up with new proposals and products to help optimize the banking value chain at every stage.
Many of them are capitalizing on the need for people-free services such as fast money transfers, managing investments, depositing checks, checking credit scores, and so on. These services will quickly grow in popularity as consumers continue to gravitate to mobile devices and online technologies to accomplish these tasks, as opposed to face-to-face contact.
According to The Economist, FinTechs that provide “computing capabilities and digital technologies, such as advanced analytics, machine learning, and the cloud, will transform the nature of services and delivery channels in banking”. This is more than just icing on the cake.
As FinTechs continue to use and fast-track their digital capabilities for the better, they will be in the best position to adapt to this growing pandemic and the technological challenges it brings. As they innovate and make the best out of these dire circumstances, they will ultimately come out on top.
Strands, like many other companies, is adjusting to the situation daily and is taking the appropriate measures to continue to provide the excellent services our clients expect of us.
We will continue to work tirelessly to offers banks cutting-edge AI banking services as they continue to embrace digital transformation, evolve their product offerings, and look for enterprise cloud-based banking platforms to help them improve and excel during these difficult times.
If you are interested in finding out how Strands can help your bank, or if you would like to get a Free Demo of our AI-powered Financial Management solutions, please fill out this form and one of our Sales Reps will get back to you as soon as possible.