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What Will Banks Accelerate Next In Their Digital Transformation Journeys?

COVID-19 saw banks accelerate their digital transformation plans, condensing them from year-long projects into a matter of weeks. In fact, research from Pega found that the pandemic increased organisations’ urgency for digital transformation, with 91% of all respondents admitting that changes are now needed for their business to survive in a post-crisis world. But as the dust settles (slightly), what is next for financial institutions? Are there any gaps emerging in their technology stack? Does legacy continue to be a hindrance? Or, has the pandemic uncovered new areas of focus?

At the centre of this, banking technology is not as efficient as is could be, and organisation structures and processes are not optimised as a result. With planning focused on what is next for 2021, there are some clear areas where banks should focus their immediate attention.

Ramp up automation: When opening up new digital channels at the beginning of COVID-19, banks will have taken the quickest route possible due to the extreme pressure they were under at the time. This will have led to some manual parallel processes being put in place, as well as quick-fix digital processes set up with a lot of logic built into that channel. Therefore, banks need to dedicate sufficient time to cleaning up their automated processes to ensure they work properly. They must also factor in any recent policy changes made during the pandemic that need to be reviewed and updated accordingly, and ensure sufficient auditability and traceability is in place.

Verification by video: In April, the FCA told industry bodies they were prepared to relax rules on financial services firms accepting customer phone photos and videos to check their identity, as one of the numerous ways to relieve the burden during the coronavirus lockdown. While several banks chose to adopt this solution, video verification is still quite a new and underutilised technology. However, over time these solutions will become more sophisticated and banks and customers will better get to grips with the technology and solidify what has already been done, ironing out any teething problems that may have been experienced so far.

Invest in better systems: What COVID revealed was many situations where banks wanted to carry out a process or offer a product or service digitally, but they simply didn’t have modern enough technology in place to do so. Looking ahead to 2021, even in an investment constrained environment, they will want to invest to improve and protect. To upgrade processes and offerings online will require a clear focus on the areas requiring risk mitigation, service improvement, revenue protection and with high cost improvement opportunities.

Distributed working needs improving: The majority of banks have found it challenging having the bulk of their employees working from home: they couldn’t use outsourced operations, training was a nightmare to carry out remotely, people didn’t have the right tools available to get things done in a quick and efficient way and management is not used to a virtual environment. This was particularly problematic given the strain that customers themselves were experiencing during the outbreak, and the huge numbers who were seeking help from financial institutions. In terms of remote working, COVID was a huge wake up call for banks and will continue to spur them on to improve operational resilience to do things remotely and in a distributed manner. This means having systems that can dynamically re-route work, change prioritisations and service levels, flex what is easily automated to better manage service levels. It also means having solutions which help new team members get up to speed quickly and maximise cross-skilling options.

Employee performance monitoring: Where this has often been viewed in the past as a negative activity, tracking staff from a productivity point of view is incredibly beneficial and valuable. What is required is a dramatic shift in mindset to think about how this technology can really benefit employees so that it is welcomed with open arms instead of suspicion. Banks having a thorough overview of what is happening inside their organisation has myriad benefits, such as identifying why some people are not productive and how to fix it, what systems have delays or lags, how best to prioritise and organise work and teams etc. The primary use case for this technology is not for security reasons and keeping tabs on their staff, but to help manage teams and improve services. Yes, monitoring will be seen and used as a way to look at compliance within processes, but it has far more impact on customer service levels and outcomes than many consider. 

Automated assistants: How often has one of your colleagues looked over your shoulder and suggested a better way to carry out a task? Maybe this does not happen so much at the moment in the world of virtual working, except for the odd reminder of being on mute on a conference call! In a similar way, we already have solutions that are able to dish out handy tips to help boost efficiency. Guided processing and knowledge assistance for staff in sales and servicing is becoming far more common and very powerful when underpinned by sophisticated next best action capability. As well as being helpful, this type of functionality can also protect banks from doing the wrong thing.

All of these digital options are here right now, but there is little doubt that investments in 2021 will be trimmed to manage increases in risk provisioning against a worsening economic outlook. This makes it all the more important to prioritise where the investments will be made to optimise results across cost, revenue, risk parameters and the customer and staff experience.



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