Is COVID The Catalyst For Banking Digital Transformations?

Like all industries, banking has faced huge disruptions due to the global COVID-19 pandemic. And although the challenges facing banks have led to many negative effects, there could be a silver lining as the pandemic moves companies closer to full digital transformations.

According to Marc Andrews, VP of Financial Services and Insurance Strategy at Pega, many banks were working towards digital transformations before the pandemic hit, but they weren’t all the way there. Banks were on digital transformation journeys to allow customers access through online channels, but none of the banks had completed those journeys. With new challenges and nearly everyone banking remotely, the gaps are now highlighted.

Banks are faced with struggles from two sides: internally and externally. Internally, employees are forced to work remotely without protocols in place to scale security and efficiency. Internally, banks see the impacts of economic struggles and high unemployment as they face cash flow issues with many customers out of work and unable to make their loan and bill payments.

As challenges grow and evolve, banks are having to quickly shift resources. Requests like fee waivers and small business loans are going through the roof, so much that banks are having to bring on new employees and shift things around internally to manage the flow. All while employees are working remotely in an industry that never expected to be able to work from home.

With incomplete digital transformations, banks simply weren’t prepared to handle the huge number of requests and didn’t have tools in place to enable customers to bank without going into a branch. Andrews says most banks started by trying to manage the crisis with basic websites to capture customer requests. Those basic forms collected information, but the requests often had to be handled manually and created a huge backlog.

Most banks are now moving to the second phase: business stabilization. By now they’ve largely figured how to have employees work from home and customers bank remotely and they’re turning to partners to create more intelligent forms to capture customer requests and automate the responses.

In Canada, one bank partnered with Pega to create an intelligent form to automate payment request from the government. Within the first three days, the bank automated more than 60,000 payments and allowed customers to make and track their loan concession requests. The digital system was much faster and more efficient than doing it manually.

For many banks, the pandemic will act as a catalyst towards full digital transformation. Banks and their customers will see that they can’t live without these technologies. Instead of focusing only on certain aspects of the digital transformation by offering digital tools just in certain areas, banks will realize how much they need to fully transform. They need to deliver end-to-end digital journeys that aren’t specific to a single channel.

Andrews says that in order to be successful, banks must build from the middle outwards instead of starting from the front end or the back end. A full digital transformation allows people to use any channel on the front end and any system on the back end.

Digital transformation is the future of banking, perhaps now more than ever before. Our world is constantly changing, and banks that offer full digital journeys will be best set up for long-term success.

This post is sponsored by Pega. About our sponsor:

Pega is the leader in cloud software for customer engagement and operational excellence. The world’s most recognized and successful brands rely on Pega’s AI-powered software to optimize every customer interaction on any channel while ensuring their brand promises are kept. It’s almost time for PegaWorld iNspire, the annual conference from Pegasystems. Join them online for free on June 2 from 9 a.m. – 11:30 a.m. Eastern Time to learn how the world’s most impactful companies are driving digital transformation – which is more important than ever in the COVID-19 age. They’ll have compelling keynotes, demos, and case studies in a highly interactive virtual format and a few surprises as well. Go to www.pegaworld.com to register for free and check out the full agenda. I’ve attended the last several PegaWorlds in person and I can’t recommend it highly enough, so go register today! That’s www.pegaworld.com.