Smart action to overcome COVID impact
KUWAIT: To know more about COVID-19 impact on the IT and financial market and action to overcome the situation, we spoke with the industry expert Jacob Zachariah Karuvelil. An MBA holder from the University of Liverpool, UK, Jacob is a visionary business leader who brings over 3 decades of experience in the fields of IT, Banking, Finance, Operations, Organization Development, Compliance and Standards, Legal and Core Banking System end-to-end services to clientele. Jacob is currently the Partner of Testhouse, an organization that is the global leader in pure-play Quality Assurance and DevOps services.
Jacob enlightens us that, like any other sector the impact on the financial and affiliated services industries is expected to be equally bad and restoration to the norm will require some serious planning and action by the industry leaders. Banking and financial management will never be the same. It is evident that based on how long we take to settle after this pandemic, the way people bank, the use of the latest technology for work and life, and the value of brands will inevitably change. Banks being one of the most integrated establishments to the general public will play a key role in the restitution of tomorrow.
Executive management focus: McKinsey in a report has indicated the relevance of risk and capital management-credit-loss to be key differentiators in managing performance post-COVID-19. It becomes quintessential that processes are reviewed and revamped while ensuring that the organizations’ IT function is well aligned with the business goals. The need to be Agile has been proven to be a significant virtue operating under the current crisis conditions and Executive Management should imbibe these principles into their core values and how they for evolve into a more effective and efficient organization.
Branchless banking
Banks of today should look to transform the way they engage their customers with the bank. Just as we have seen how the usage of the cheque for financial transactions is almost on the verge of becoming obsolete, the banking sector should be prepared for the evolving nature of way transactions will be carried out in the Post COVID-19 era. Customers would be driven to interact
with tech kiosks for most transactions, reserving real person interaction for indulging unique requirements that cannot be managed otherwise. More of Interactive teller machines (ITMs) will be the norm, enabling users to directly deposit and withdraw funds, or inquire balances, and going one step further, this can include video screens so that in case customers would need further assistance they can use it to speak with human tellers. ATM innovations are already available globally for example, biometric authentication is already used in several countries, and iris recognition is in place at ATMs in middle-east. These technologies can further help ensure better security by protecting against ATM hacks.
Contactless payment options are rapidly being adopted across most banks where cards have been the norm for quite some time. Technologies that use radiofrequency identification (RFID) or near field communication (NFC) allow smartphones and other mobile devices to be used for payments. Mobile wallets are very common now; these applications emphasize convenience allowing their users to make purchases with their smartphones – without ever having to take out their physical credit card. These new options would be the new standard; typical Branches and ATM are a dying mode of banking. At the same time, this can also be considered as an opportunity to transform regular branches into a network of highly connected smaller, digitally enabled, multi-format units that offer an engaging personalized experience that supplements the customer’s digital interaction with the bank.
Products innovation
Innovation will be the keyword - banks need to innovate and come up with an alternative and revolutionary measures and products that could provide customers’ newer ways to manage, save, and even source income. This will sway existing customers to engage more and attract new ones. As per ‘Business Insider Intelligence’, mobile banking is flourishing at five times the rate of online banking. Successful mobile banking options that new banks are providing also include money management features. Savings and financial wellness scoring tools, are seen to be attracting millennials and is essential with new-age mobile banking
Replace legacy systems and outdated IT technology:
Software providers and banks using outdated IT technology and product will be out from the market shortly. So, the priority should be to have an advanced product with the latest technology. The growth of mobile and digital transformation in the banking system is already explosive. Some of the new technologies such as blockchain, machine learning, and cloud computing will enable banks to improve numerous facets of banking and automate their operation. Artificial intelligence solutions, such as Chabot’s, often assist customers in simple tasks such as providing customer support (now 24x7) and for making payments.
Omni-channels
Almost all banks were already talking about digital transformation, most had initiated it and many have implemented it but the time has now become inevitable that if one isn’t ready they won’t survive anymore. Banks management should provide top priority to transform the operations to cater to the digital world and being customer-centered, and that means offering seamless Omnichannel experiences. Banks should use customer journey mapping tools to engage with customers beyond traditional financial channels. Understanding mobile banking or digital banking usage of customers will help guide on how to make the best use of existing digital channels. Banks can then use re-targeting options to reach out to customers who have not made any transactions. The successful banks and financial institutions would proactively update their customers much before they feel the need to reach out for help, especially in times of crisis.
Better usage of resources and reduction of overhead: As per the latest edition of the “Global Economic Prospect report”, the current recession is said to be the first such for over 100 years that has been sparked by an epidemic.
Importance of work from home
While the impact of COVID 19 has touched all facet of our lives globally, it also has revealed the advantages which a WFH solution can provide. Owing to adherence to best service practices, the transition to WFH has been particularly smooth for the IT industry and banking sectors which have continued to provide the same level of service without having a significant impact on productivity. Collaboration tools like Zoom, MS Teams, WebEx have greatly helped to promote teamwork and discussion even though physically we may be miles apart. This indicates that organizations and business leaders need to seriously evaluate the pros and cons of establishing the WFH as a permanent strategy even after the impact of COVID-19 diminishes.