The UK fell into recession for the first time in over a decade last year and is on course for a double-dip recession this winter and a far more difficult path to recovery in 2021. Without doubt, COVID-19 has created a tumultuous economic environment and banks have been on hand to aid both businesses and consumers through their hardship.

When the pandemic struck, banks supported customers as best they could with rapid financial assistance to keep the economy and people’s lives on track. One could argue that they have done about ten years’ worth of lending in 2020 alone. But despite the continued financial support from the government, the ramifications have been huge: many people have been left jobless, banks are facing heavy debts. Combined, this will create a scenario where swathes of banking customers will not be able to pay back what they owe in the coming months. 

Balancing the books

Financial institutions have a tough job ahead to balance their books. On one hand, they will need to do everything they can to cut costs and ride out the recession. Yet, on the other, banks will have to invest in digital transformation projects to get back on track, such as via intelligent automation which can help streamline costs while also speeding up processes and improving customer satisfaction. The balance between focus on the cost and revenue levers will be critical.

Of course, they cannot afford to neglect investment in customer service, as they are relying on retaining existing customers and attracting new ones to help boost (or at least protect) revenue. Customers expect the same kind of frictionless and efficient experiences that they receive in other industries. There has been an acceleration of digital demands from customers born out of necessity but also expectations. From account maintenance to service requests to inquiry handling, they want a timely and responsive service at every interaction. When customers are turning to banks in their time of need, financial institutions must be able to provide a connected and consistent service across every channel, and across the full client lifecycle of needs to give them the confidence and trust in the brand. Only then can they maintain client loyalty.

So how can banks use technology to alleviate the inevitable economic pressure they face?  

Take a centre-out approach

First, banks must review their business architecture and deploy a “centre-out” approach. This is a way of structuring an organisation’s technology around the outcomes that need to be achieved for the bank and its customers – in this scenario it is to improve margins whilst simultaneously improving the customer experience. By putting customers at the heart of operations, it is possible to develop a common micro journey that runs across all of the bank’s channels, meaning customers receive a consistent experience. With this approach, banks can focus on the outcomes that must be reached and then directly integrate that into the customer journey (or microjourney), such as applying for and getting a loan, or resolving a billing inquiry.

It is also important to have AI and case management working together – intelligent automation. With traditional case management, banks are constrained to basic tracking and ticketing. With intelligent automation you can capture, process, and resolve inquiries efficiently, cutting across existing systems and virtual teams to drive work from start to completion. This makes it easier for the bank’s customer service team and customers to achieve the outcome they want – on every channel, every time, in the most cost-efficient way.

Low-code will be vital for speed and enabling better collaboration

The adoption of low-code technologies will also help to streamline operations, getting changes out quicker and also helping teams work together more easily to solve problems. Where customer service representatives are dealing with new scenarios on the fly, they cannot be held back by legacy applications. Instead, they need software that can flex and adapt to new and changing customer needs at the drop of a hat. IT teams have enough on their plate with dealing with pressing issues such as managing the remote workforce. With low code, the customer service team can more easily work with the IT teams as well as independently to quickly change their apps so delays to customer service can be minimised, whilst taking the pressure off the development team.

It’s not all about ‘the branch’

There’s plenty of evidence of branches under pressure from the drop in cash utilization and increase in usage of digital channels for simple service tasks, and that was pre-COVID. And whilst there have still been queues at high street branches during this period, 2021 will see an acceleration of replanning and repurposing branch networks. Given the long-term primary role of a branch and business centre has always really been about sales rather than service, it is in this space that focus needs to stay during any change. Being able to complete product origination digitally will have as much focus as customer service transformation this year. There are still many gaps to be filled in lending and account opening. This should be done in advance of branch changes to reduce the chance of revenue leakage.

Despite the vaccine being rolled out, it is not all plain sailing from here. Banks cannot afford to be short-sighted in their approach to technology investment. Fortunately, technologies are more advanced this time around and banks will be taking advantage to streamline their operations and reduce costs.