Banking Beyond Covid
4 trends reshaping the future of retail banking beyond Covid-19
The COVID-19 pandemic has posed the most serious challenge to financial institutions for nearly a century.
As Mckinsey reports the COVID-19 health crisis has reshaped the global economy and society. Retail banks, like most companies, face an urgent imperative to reimagine themselves, with COVID-19 accelerating consumer behaviour shifts and causing significant earnings challenges given the tough macroeconomic context and extensive risk of financial distress for both consumers and businesses. We see four trends that could be of particular relevance to NCB moving forward.
Consumers’ banking preferences are rapidly evolving
As we move towards a cashless society, and Mckinsey predicting up to 25% fewer branches in the post Covid era, and recording a recent preference for handling everyday transactions digitally (as high as about 60 to 85 percent across Western European markets, even for customers 65 years of age or older) Digital Transformation is set to be the leading opportunity in the immediate to mid term.
Redefining a future fit physical banking environment
Whist the way people bank has changed, it might not yet be permanent, thus you can’t assume customers won’t revert to their previous channel preferences. If you want behaviours to stick, even in the current environment, it will be necessary to invest in marketing, to build awareness of the options open to customers, to share the successful experiences of new digital customers, as well as to support vulnerable customers or those that still do not feel at ease using digital channels.
Customer demand for greater flexibility and security
In a recent EY survey 27% of consumers agree that banks will be more flexible in the next 1-2 years – with Banks having a role in helping customers become better prepared, through savings, investments, insurance and income smoothing products.
In fact, this crisis may accelerate the adoption of some subscription- based models for financial services, with a quarter of individuals saying they would be willing to pay a premium for products that promote well-being, the link between health and wealth may emerge stronger than ever.
Responsible banking is more important than ever
More than half of the respondents of a recent EY survey indicate that their future purchasing decisions will be impacted by banks actively supporting the community, being transparent in all they do, and ensuring they are doing good for society.
These four trends suggest that those with a mantra of customer centricity and responsible banking are likely to emerge as strong as ever.
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