Banking on lockdowns: The digital opportunity in COVID-19

Adapting to continual lockdowns 

The closure of bank branches demonstrates the true scale of COVID-19 and the shift in customer behaviour during the pandemic. Banks are now adapting and future proofing their business models in response to societal changes.

The shift in customer behaviour has put increased pressure on banks to not only accelerate digitisation, but to ensure that traditional customers are fully supported - from the physical in-branch experience as well as digitally. 

With new COVID-19 variants emerging and national lockdowns continuing across the world, banks must seize the digital opportunity and adopt a flexible business model that absorbs the impact of changes to working practices and an increased demand for digital services. Dare I say it, we need to prepare for a future where lockdowns become routine!

To meet the new demands of a stay-at-home society, banks need to act quickly to improve aspects of their digital banking experience that cause frictions for their existing and prospective customers. 

A touchless experience to overcome health concerns  

During COVID-19, digital technologies which provide a touchless experience to overcome health concerns and increase convenience, are more important than ever. They enable companies to remove friction from their customer journeys along the physical-digital transition.

In our ‘Banking Friction’ report we examined UK digital banking app reviews, highlighting the main frictions where banks can improve their digital experience. We found that although major UK retail banks have an average app rating of 4.7 out of 5, specific app features - such as login and sign-up (2.0), notifications (2.5), and customer services (2.6) - had lower ratings. This shows that there is room for improvement in traditional banks’ digital onboarding processes.  

In our research, it is clear that banks need to focus on improving their digital onboarding experience. An example of a bank that has removed the frictions in digital onboarding is ila Bank: The first digital-only bank in Bahrain. 

We partnered with Bank ABC, providing a team as a service, to build ila Bank and help them digitally onboard customers. Using digital identification technology, onboarding for each customer took under five minutes and - once completed - we implemented a celebration screen to make every customer feel special and rewarded. In addition, ila Bank has also enhanced its customer experience by harnessing AI to create a virtual assistant, named “Fatema”, providing a 24/7 personalised banking service. In recognition for ila Bank’s virtual assistant innovation, Bank ABC has been named the winner of the 2020 Gartner Eye on Innovation Award in the Europe, Middle East and Africa (EMEA) region.  

The future of banking post-COVID-19 

COVID-19 pandemic has accelerated a shift to digital banking, but will this shift signal the death of in-branch banking in the future?

As society returns to a sense of post-vaccine normality, banks will explore new ways in which they can increase levels of accessibility, so customers can bank anywhere, anytime.

In the future you could be visiting your local coffee shop and before you order you receive a message from your bank with a promotional offer for a free coffee, to incentivise the on-boarding of their banking app. Once fully onboarded the bank can communicate and support their customers in their banking needs more effectively. With technological innovations like this, banks can improve customer loyalty, retention and grow their client portfolios. 

The future of the branch strategy will include a community financial services hub model. This is a collaborative project where banks occupy the same retail space as other businesses. 

Customers who require in-person banking services will be able to visit the hub, where they will be greeted by a digital assistant who identifies the customer and directs them to the relevant banking service.

By offering a premium for the traditional banking experience, banks can carve out new revenue opportunities while provisioning for customers who require face-to-face banking. It is crucial that the future of banking accommodates those who can’t, or may not want to, use digital services - as well those who do.