The digitalization of the banking industry has been widely discussed in recent years. Cost efficiency through low interest rates, the Payment Accounts Act (Zahlungskontengesetz), PSD2, Fintechs – there were many arguments for it. But only now, in the face of closed branches due to the coronavirus pandemic, are we experiencing a wave of digitalization. Which touchpoints and processes will survive the crisis?
Social distancing is shifting life more and more into the digital world. According to studies, it’s not only gaming and entertainment apps that will seen significant increases in installation numbers in the first quarter of 2020. According to the Mobile App Trends Report 2020 by analyst Adjust, business apps are also showing significant gains. Compared to the same period of the previous year, usage time has more than doubled and the number of installations has increased by 70 percent.
The digital customer journey has suddenly become indispensable for bank customers as well. Contactless payment, for example, is officially recommended by the WHO. According to estimates, half of all card payments in Germany are already contactless, as reported by the Tagesschau. Customers now research information on their asset management digitally, as they can no longer visit their bank advisor in person. Even complex consulting services such as construction financing or corporate loans are available online. Video consulting in general has received a new boost and has become an equal means of communication for all institutions, while it was previously used mainly by direct banks.
Nevertheless, local branches remain an important point of contact for many customers to obtain cash. In the middle of the crisis, the Sparkassen-Finanzgruppe launched a new app, proving that it can both be there for customers on a regional basis and at the same time offer digital added value.
The employees of many companies are currently working from home, and the same applies to many financial institutions. Safe, mobile, flexible – this seems to be the new motto. But this way of working will only really flourish if not only communication, but also processes are digitized. The corona crisis is forcing us to find ways and means to do this quickly. The accelerated online application procedure for the coronavirus emergency aid program of the Bavarian Ministry of Economic Affairs is an example of how digital processes can be introduced quickly and function smoothly.
The current situation also gives banks new purpose. While many companies are desperately searching for their “purpose”, banks are already distinguishing themselves as the saviors of the middle class in these difficult times. This sense of purpose in combination with flexible jobs offers banks the opportunity to establish themselves as an attractive employer brand. According to a recent study, one in three employees would like to have the opportunity to work from home, even after the corona crisis. The task now is to consistently implement this cultural change and anchor it in the working model of banks. Consulting packages such as those offered by T-Systems Multimedia Solutions can help with this.
According to statistics from W&V, 19 percent of advertising measures with a reference to the coronavirus currently express the message “We are here for you.” Almost half (49 percent) of the corona-specific advertising measures focus on business continuity. As short-term information, this may well work – but does this really turn a bank into a likeable brand in the gray world of financial service providers? It is much more important to establish clear positioning during this time or to at least enhance your own brand.
Now is the time for banks to set themselves apart from the competition – with fresh ideas, a contemporary image, and appealing campaigns. Online banking has to offer an excellent customer experience and win awards for design and usability. The individualized EC cards have to become a fashion accessory that influencers use to post in their Instagram selfies. Customers must be able to adjust the credit card limit in their app immediately and conveniently, should the need arise. These are just a few examples of how banks can emotionally charge their brand.
The VUCA world is constantly presenting banks with new challenges – customers, crises, and new competitors are now setting the pace. Banks have long since stopped sitting on their high horse and offering patronizing services. A bank’s flexibility must be reflected in tailor-made offers, relevant brand messages, and excellent service. And they have to result in agility with which a bank can react to the outside world.
Banks are gaining favor in the corona crisis – either as local, regionally rooted institutions or as quick helpers in financial matters. Banks that managed to immediately support their customers during the crisis are now enjoying high customer loyalty. In any case, they are a reliable point of contact for financial matters. The crisis thus becomes an opportunity to polish up your image and catch up on aspects of digitalization that have been neglected in recent years.
There will be a market consolidation in the banking industry, no question about it. Potential customers will turn away if the credit application is too manual for them. They will go to the bank that makes loan applications available quickly and digitally. Banks that simply revert to business as usual after the coronavirus pandemic will find themselves the losers of the crisis. Customers have quickly become accustomed to new touchpoints and digital processes. They will also expect these after corona.
