Covid-19 pandemic has changed the way people work, shop, socialize, do their banking, and make payments. It has affected the financial industry more than any event since the Great Recession. Now the banks are being forced to reduce the working hours, limit the number of staff present, and in certain cases, the customers are required to take prior appointments before visiting. The normal way of doing business has all been disappeared.
The shift to digital banking was already taking place before Covid-19, but with the crisis, more customers than ever before are turning to digital banking platforms as an alternative to branch visits. The number of online account openings increased by more than 200% in April alone and mobile app traffic rising by 85%.
Adam Swinemar, Vice President of digital channels, Scotiabank says that just as the customers have had to shift, the banks are also required to shift.
Challenges in Digital Transitions
According to Swinemar, the biggest challenge in the shift to digital banking was the sheer speed at which the transition had to take place. On the other hand, the banks are also required to set alternatives for customers who face difficulty in switching to digital banking.
Efficient and simplified digital onboarding processes were also crucial to ensure smooth digital transactions. Customers who face difficulty in opening the digital banking account are more likely to abandon the process and possibly even find another bank. This stipulates why a convenient onboarding experience is a key factor in any digital banking initiative, much less one occurring in the middle of a global crisis.
Digital Banking- post covid
A recent study found that 60% of bank customers continue to use digital platforms even after the pandemic and don’t plan to resume the traditional banking system. Swinemar says “Once they make that behavior change, those behaviors to digital tend to stick over time”
The digital transformation helps the banks to gain more ideas about their customers’ financial habits. Banks are now able to understand when, where, and how customers use their services. Using the data banks can offer customized products to their customers.
Since many banks are coming up with more digital options, customers are availed with multiple options to meet their banking needs. Therefore each bank must maintain customer loyalty through these targeted offerings, or customers will simply open accounts elsewhere.