How to save banks in coronacrosis: key expert tips

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The consequences of the COVID-19 crisis will be tangible for banks, consumers and businesses for a long time to come. In order to quickly set up all the processes upon completion of the quarantine, some steps now need to be taken. Where to start?

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First, it should be kept in mind that the current situation will fundamentally change the behavior of customers. Coronavirus accelerated the introduction of digital technologies – video conferencing, P2P payments and online banking became familiar to customers. Changes in user habits will change the banking landscape, forcing players to develop digital channels. The experience of Italy and China confirms this – four weeks after the outbreak of coronavirus, the number of users of digital services increased from 10 to 20%.

McKinsey introduced Report, Which addresses major challenges for banks during a period of crisis, advises how banks should respond and how to maximize profitability of the situation.

New, more flexible, operational model

Banks around the world are forced to adapt their operating models to new realities. And the best of them does this strategically to implement innovations in the future. In an epidemic, banks first need to take steps to protect the physical and mental health of their employees. To do this, introduce temporary operating models for departments and develop models of remote work.

Preventive measures to protect employee health

Most banks serving business and retail have already taken basic steps to protect the health of employees. They have strengthened sanitation and hygiene rules inside offices, both in customer service areas and around ATMs. Protective and prophylactic devices are transported to departments: thermometers, hand sanitizers, and other personal protective equipment. In addition, the work areas are equipped in such a way that the distance between them is not less than 1.5-2 meters.

Additionally, banks can initiate a process to measure personnel temperature, mandatory use of masks and gloves, etc. Chinese banks also operated disinfection of paper banknotes. Later, some South Korean banks borrowed the practice.

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Creating a temporary operating model for departments

Banks change the schedule of branches based on the situation. For example, in the United States, JPMorgan Chase temporarily closed 20% of its branches and reduced staffing to the rest. Some other banks are now open only in the morning. The six largest Canadian banks announced collaborations for the duration of the crisis, to limit the work time in each of them, as well as continue to provide critical services to customers.

A simultaneous coronovirus epidemic in wards may require a reduction in the workforce. A bank may use only half of its employees or develop a rotation schedule in which one-third of its employees are in branches, a third do not work, and a third work from protected locations or from home.

Finally, banks should actively limit the flow of customers to branches. For example, you can register an appointment by appointing or limiting the number of customers in the department (must not exceed the same time serving). You can also use demarcation marks on the floor so that customers are at a safe distance from each other. Many banks also provide sanitation products at the entrance of the department.

Some banks offer special service hours for at-risk customers. For example, the British Nationwide Building Society (the world’s largest building society with more than 15 million members) will open about 100 offices an hour before other risk groups to serve larger people and customers. Large US retailers such as Target Brands and Whole Foods Market are taking similar steps.

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Well, of course, online banking allows you to do basic operations without visiting the branch. And you can ask all your questions using remote communication channels.

Develop remote support model

Like other sectors, many bank employees work remotely during quarantine. There they face operational difficulties – problems with the Internet and equipment, the need to tear between work and child care, etc. Here are some tips to organize your remote work in the coming weeks.

Cross training and re-refilling of employees. During the quarantine period, there is an increasing demand for customer requests on issues such as loan repayment period, credit leave and fraud related activities. Following the example of JPMorgan Chase and Quick, banks can transfer the share of employees from other departments to teams that deal with the most popular issues at the moment.

Establish technical infrastructure for remote work. This may include helping employees set up their home office providing VPNs and remote access applications. In addition, banks need to provide a set of tools necessary for effective collaboration – video conferencing, joint editing and task management. It is important to ensure that employees have all the necessary equipment and resources to make calls from home while maintaining customer privacy standards.

Development of corporate culture to maintain employee spirit

In these difficult times, it is natural for employees to feel depressed, uncertain about work and fear of recession. It is important for bank managers to give clear instructions to remote teams. This requires that managers make daily checks of their rights to employees to make decisions, and assign part of their authority. Motivation will help maintain employee morale through both precise control and reward.

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Furthermore, when working remotely, a sense of order is lost. Starting virtual meetings and “happy hours” will be useful – when employees can share achievements, experiences, and new experiences. This will strengthen the feeling of unity.

Customer service in difficult times

In these difficult times, it is important for customers to maximize work with the bank.

Show customers that you care about them

Unlike 2008, when people largely considered banks to be the source of financial crises, today many see them as part of the solution to problems. In return, banks are taking steps to reduce negative financial consequences for customers, providing more comprehensive advice and leadership efforts to support the community. Here are some measures that can show the bank’s customer care.

Credit leave and deferred payment. Such a thing as a credit holiday is quite common in the world. In emergency situations (and coronaviruses are just that) banks can eliminate penalties for late payments on loans, freeing customers from repaying the principal amount of the loan over a specified period. Of course, no one has planned to forgive the debt. But their postponement is an important support for customers.

For example, Goldman Sachs allowed Apple card users to skip March payments. Allied Financial allowed customers with car loans and mortgages to delay payment for 90–120 days. We hope that there will be many more such examples.

READ ALSO: How loans work during quarantine in Ukraine: Analysis

Providing financial literacy services and helpline. Customers who were forced to switch to use remote banking services under quarantine may require support from bank representatives more often. They will have questions, they may require additional confirmation. Therefore, banks should develop tools that increase financial literacy, write about the main issues that may arise on their websites. In addition, you need to set up a help line for customers who need support for remote transactions.

Custom methods. Many banks went far beyond financial measures. For example, Chinese China Construction Bank, together with the country’s authorities, launched a digital platform that helps local administrations monitor the number of citizens infected with coronovirus in some areas. The platform also helps in applying to return to work.

category Innovations

Bank

How are you?

effect

Contactless banking

Ping a bank

“Do at home” service, for which customers can apply for financial and non-financial transactions

Over 8 million pages viewed
116.7 million transactions
3.05 million users (since 3 February)

Video training

Bank of China (BOC)

In three streaming videos, the bank’s leading investment managers talked about the impact of Coronavirus on capital markets and new asset management products

More than 26,000 views of first video
Over 44,000 views of all videos

Build ecosystem

China Construction Bank (CCB)

Smart Platform for Bank Customer Community

Oh, is that soThis includes 738,500 different communities, 404,000 companies, 1,337 schools – a total of 101,600 users per week.

China Merchants Bank (CMB)

The application launched online counseling, real-time epidemiological status, online financial services, search for product delivery services, online courses, etc.

100 million visits
1.6 million consultations

Uninterrupted customer service and new ways of working

The coronovirus epidemic has dramatically changed the way customers manage their finances. Many of them found themselves in a difficult financial situation, which is why they need access to banking products and services quickly. What to do so that after a crisis, customers remain loyal to their bank?

Encourage the transition to digital services. Banks should encourage customers to use remote channels and digital products. To do this, a secure messaging process should be put in place, which will reduce dependence on offices. Banks need to expand their current digital offerings, creating understandable instructions for using traditional banking services remotely.

Maintain customer engagement through SMS, mobile apps and online media. Timely communication will help reduce unpleasant surprises for customers (for example, closing one or another branch), stimulating measures to prevent fraud, clarifying the availability of digital solutions, and security measures at branches To inform about For example, Chinese banks keep branch status information in mobile applications. Some have implemented a reminder mechanism to pay bills, deposits, expenses. These measures engage customers and contribute to their financial health.

Photo: thearabweekly.com

Serving vulnerable populations. Many of the bank’s customers were sensitive to coronoviruses, especially older people, not active online users. Banks can be creative with short-term solutions, such as remote messaging at the customer’s doorstep and delivery of paper messages. For example, German Sparkus set up mailboxes for direct transfer of an account without human intervention.

Stabilization of critical infrastructure, systems and processes. The current situation will inevitably lead to technical failures. Banks must prepare resources, scale capacity, channel capacity, perform infrastructure stress tests and identify vulnerabilities.

Rethinking Portfolio Strategy for Small Businesses. SME banking leaders want to review their portfolios and lending strategies based on specific market segments. This will allow them to focus on key areas and customers, which in today’s situations is not only the right move, but will also strengthen long-term relationships with the customer. Banks may need to develop and implement programs to financially support the industries most affected by the crisis. For example, the US Small Business Administration has developed its lending package for small businesses affected by COVID-19.

The epidemic and the crisis it poses are challenges for any business, including banking. For consumers and small businesses tomorrow’s bank will, most likely, look very different than yesterday. इस कठिन अवधि को सफलतापूर्वक पारित करने के लिए, बैंक एक अधिक कुशल और ग्राहक-उन्मुख मल्टी-चैनल इंटरैक्शन मॉडल पर स्विच करके शुरू कर सकते हैं।

इसके अलावा जांच: कोरोनैक्रिसिस ने प्रौद्योगिकी को कैसे प्रभावित किया


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