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It has been a year since the world began the hard battle against COVID-19. How has it impacted the banking so far and potentially down the road? Here are some observations and thoughts.
Business Continuity and Workforce Productivity
When the health crisis hit in early 2020, many banks immediately went into crisis management mode. Business continuity was top of mind, in order to fulfill the mandate to keep the banking system functioning.
“With increasingly interconnected systems, there are more entry points for cybercriminals. Third-party risk management needs to be an integral part of the bank’s cyber strategy.”
The decentralized workforce reduces the risk that a worksite is shut down by an outbreak. Even call center jobs began to get distributed to multiple sites or employees’ homes. The strategic investment of relevant technology is not an option anymore, but a must for the institution’s survival.
With the business continuity is largely taken care of by now, banks needed to continue to enhance productivity, which was a mandate even before the pandemic. This means further investment in the key technologies, such as communication and collaboration tools, to better equip the workforce in the digital era.
Fight the Pandemic of Cyber Attacks and Fraud
During the health pandemic, banks also face another pandemic of cybersecurity threats and fraud.
With increasingly interconnected systems, there are more entry points for cybercriminals. Third-party risk management needs to be an integral part of the bank’s cyber strategy.
The increased fraud requires a better response system. As clients reach out for help after falling victim to fraud schemes, a quick response with a clear resolution will ease the client’s mind and further strengthen the relationship.
There is an opportunity for banks to continue providing value-added services to help clients detect and deter potential fraud early on. Make clients part of your anti-fraud defense system. In the fight against fraud, banks and their clients are in this together.
Timely and Actionable Intelligence
Under the pandemic, the need to access key intelligence becomes more urgent. The quarterly or monthly rear-view reports became less relevant in a rapidly evolving environment.
Insights from real-time data are essential to support timely decisions. The edge of an institution does not come from solely owning a large amount of data. It is the ability to use the data to drive timely and meaningful actions.
To better satisfy such needs, the data environment needs to be configured to support the analytics mandate. A high degree of automation and deployment of AI should be pursued.
One thing we learned in 2020 is that the workforce is subject to interruption by many events, such as social unrest, natural disasters, and the pandemic. The automated solution enabled by technologies would reduce such operational risk.
Invest for the Future
Banks have demonstrated resilience during the pandemic. Now it is time to look forward and invest in the future.
With the economic uncertainty in the midst of the pandemic, the decisions of investment might not come easy. However, the sooner the adoption of key technologies, the earlier a bank can reap the benefit of digitalization, capture the key data, act upon the derived insights, and accelerate the learning through positive feedback loops.
Banks also need to invest in their employees, via various programs such as diversity, mental health, and technology training.
There might be different paths before banks in the digital age, but the pandemic clearly set the direction for the industry.