In addition to being a health and humanitarian crisis, the COVID-19 pandemic is also, undoubtedly, an economic one. It could be considered one of the most serious challenges to ever affect the financial industry, with far-reaching effects that will likely continue to be felt globally for years, long after its more immediate dangers have subsided. And though the world has, thankfully, begun to recover, financial institutions—especially corporate banks—still have a long way to go in terms of dealing with the economic fallout.
There’s no question that a strong recovery can only be possible if the banking sector manages to successfully reposition itself according to the demands of a post-pandemic world. Corporate financial institutions must also be prepared for any challenges that have yet to present themselves in the event of a second wave, or some other unprecedented future event of the same scale. Here are a few strategies on how yours can adapt to how COVID-19 has changed the industry and prepare for the future:
Driving Digital Adoption and Transformation
In order to recover from the devastating impacts of COVID-19, corporate banks have a responsibility to help and enable their customers towards productive economic activity. This means adopting processes that can make corporate banking easier, more convenient, and more seamless. In a lot of ways, this now means leaning fully into digital transformation.
There are clear benefits to adopting digital services and solutions for both banks and the people that they serve. During and after the pandemic, those benefits are now more readily apparent—and necessary. With branches and offices closing or operating on skeletal forces, the delivery of banking services slowed down considerably, despite demand for them staying the same or even increasing.
Digital services for common transactions such as account opening and loan application can help ease some very specific pain points. A modern payments platform enables near-immediate processing and settlement while also enabling real-time views of a business’s financial position.
Developing New Products to Reflect Current Realities
For the most part, there haven’t been many innovations in corporate banking products and services simply because there hasn’t been a need for them. What businesses need and expect from their financial institutions have largely stayed the same throughout the years.
The COVID-19 pandemic has changed all that. Some businesses have been hit especially hard, and now require products and services that can help them get back on their feet. They may require more flexible offerings that will give them a fighting chance at regaining what they’ve lost to the crisis while creating opportunities for growth.
Corporate banks are best poised to offer these propositions to both existing and future customers. Using data to manage risk and analyze market trends, they can also become financial advisors to their clients. That same data can also be used to create more personalized experiences and deliver higher value to their corporate customers.
Adjusting to the Challenges of a More Distributed Workforce
Though much of the future remains uncertain, there is one thing that many experts agree on: the way we work will never return to the way it was before COVID-19. Not only has remote work proven surprisingly effective during these uncertain times, it has also allowed banks to significantly reduce their carbon footprint. The savings from giving up physical office spaces and all of the costs associated with their maintenance and upkeep have also made the option more attractive to financial institutions.
Like many other industries, banks are shifting towards different return to work models, staggering the return of their employees or creating more flexible arrangements, such as blended or hybrid models where workers are required to be in the office only some of the time. A substantial percentage of bank employees are also expected to continue working remotely on a more permanent basis.
Keeping workers engaged and maintaining productivity are only some of the major challenges that corporate banks will have to overcome. Long-term effects on work culture, teamwork, training, and risk management are all to be expected, and financial institutions would do well to prepare themselves for any unexpected situations.
Refining Operating Models
To say that COVID-19 has been enormously taxing on financial institutions is an understatement. Many have had to extend their credit lines for clients whose businesses have gone under because of the crisis, and they have also been tapped by their governments to deliver stimulus packages directly to hundreds of thousands of their customers. This stress test of sorts has since identified key areas of operations that have struggled to respond to a sudden and unprecedented demand.
As we move further away from the immediate crisis, corporate banks should take this opportunity to learn from the experience, reassess where the pain points are, and work towards eliminating them. Investing in end-to-end digitalization and automation of vital processes can help banks be ready for whatever the future holds.
Though the most immediate dangers of COVID-19 are slowly becoming a thing of the past, corporate banks should still brace themselves for continued uncertainty. Taking these necessary steps to strengthen themselves in a post-pandemic world will determine how they overcome these trying times and bring themselves into the future.