REIMAGINE WITH AI

Blog

Reimagining Commercial Banking in the Post-Pandemic Era

Reimagining Commercial Banking in the Post Pandemic Era

During the COVID-19 pandemic, banking, like other industries, faced unprecedented challenges. Commercial activities halted, causing major disruptions to cashflows and operations. The primary challenge for banks was the shift in the financial services market. EY research showed that 43% of consumers moved away from traditional banking due to COVID-19. The study also found a 57% decline in cash usage, with increased reliance on digital payments like credit cards (7%), debit cards (10%), and online payment tools (14%).

The pandemic accelerated the shift in financial services markets, but banks were unprepared to benefit. Nearly 50% of customers bought financial products from other businesses due to pricing, digital tools, and convenience. People now prioritize secure financial instruments, creating opportunities for the financial services market. Banks must transform through technology and strategic changes to stay competitive. Here are key initiatives to reimagine their business in the post-pandemic era.

Omnichannel Banking Strategies Modern banking consumers expect flexible digital access to financial services. Seamless digital accessibility across web and mobile platforms is crucial for higher consumer adoption. Omnichannel strategies are fundamental for the future of banking. Convenience and accessibility are vital in the financial industry. However, transitioning to omnichannel delivery poses technical challenges and requires addressing technological shifts in complex ecosystems.

Embrace Cloud Technologies for Innovation: Cloud tech is revolutionizing digital services globally. Banks traditionally used on-premise infrastructure, but startups on the cloud attracted customers during and after the pandemic with agility, competitive services, and pricing. Cloud tech offers versatility, reliability, rapid development, and remote access. It enables quick adaptation, market responsiveness, scalability, cost reduction, and compatibility with various technologies.

Explore Automation and AI Opportunities: According to Bain & Company’s survey, 78% of respondents would buy from their primary bank if it offered a competitive deal. To provide competitive pricing, efficient business models are crucial, and automation and AI offer the best solutions for long-term efficiency and sustainability. Automation can speed up iterative processes in customer-facing and internal operations, leading to significant cost reductions and increased scalability. AI takes autonomous operations a step further, optimizing, and accelerating service delivery while also enabling real-time analytics and autonomous decision-making for strategic advantages.

To facilitate digital transformation in banks, addressing the skills gap is crucial. Banks struggle to handle both legacy technology and cloud technologies simultaneously. Hybrid cloud environments, combining on-premise infrastructure with cloud computing, have become the preferred choice. This requires a consistent change in organizational skills to adapt to new technologies and operational models.

To overcome the shortage of skills in the job market, upskilling at an organizational level is necessary. However, relying solely on upskilling and reskilling may not yield the desired outcomes as it is a gradual process. To expedite the transition, organizations should consider outsourcing migration and managed services to leverage the cloud sooner. In fact, according to fortunly, 71% of financial services executives already outsource some services, with 78% experiencing positive outcomes. Some organizations even permanently outsource their IT services to managed services providers.

In the post-pandemic era, commercial banking must quickly catch up with modern demands. The shifting financial services market has led to customers using banks primarily for storing capital, while seeking high-profit, high-margin services from non-banking providers. This situation burdens banks with higher costs while missing out on higher profits. Banks that can rapidly transform and innovate will survive the digital disruption accelerated by the pandemic. Understanding and addressing these developments is essential for banks to remain relevant in the rapidly evolving post-pandemic world.

Share

Subscribe to get latest insights

Top Trending

Blog

Blog

The Age of Super Apps

Enter the Super App age – a fusion of services redefining user interaction. Witness the transformative power of integrated platforms.

White Paper

White Paper

Insurance Outlook 2024

Uncover critical drivers and significant trends, with the knowledge necessary to navigate the complexities of the Insurance sector adeptly in 2024.

Trending Blogs

Move into a smarter future with SLK