The year 2020 with COVID-19 at the forefront had been transformative for the banking industry. Banks had no other choice than to quickly arrange for an increased volume of online services due to the lockdown and restrictions on in-person service. This resulted in an influx of customers who formerly visited branches to shift to digital banking for the first time. Consumers who previously engaged in banking digitally for paying bills or transferring money increased their online activity notably.
As a result, banks are expanding digital services and cutting costs to retain their customers, form digital bonds, and strengthen the newly built relationship with customers even after the COVID passes. Though this doesn’t imply the end to in-branch banking, online services are undoubtedly the wave of the future.
Banks and the Digital Capabilities
Banks have been promoting digital capabilities for years, but the COVID crisis propelled the issue to the forefront, creating a need for fast action. It has forced banks to deal more quickly and definitively with the digital challenges such as communicating with customers, security, and offering end-to-end services that customers demand, ranging from faster digital customer onboarding to seamless lending services and more.
By now, after months of changes, both customers and banks have apparently got the idea of leveraging digital services for all financial and banking needs. Several research firms have also noted the same. For example, in a survey, Deloitte has found that 35% of customers have increased online banking engagement during the last 10 months of the pandemic, helping the industry realize the digital promise in banking. Another study by McKinsey found that COVID has accelerated the developments in digital adoption that were expected to take five years to weeks.
