August 2020

Coronavirus banking: what has changed in the industry?

In the last few years, online banking has become an integral part of every single financial institution. However, recent pandemic forced all the banks to embrace digital solutions on an unprecedented scale in just a few weeks or, in some cases, days. Customers’ habits also have changed, leaving many experts in the industry with just one, seemingly simple questions: how banks changed in response to the sudden transformation? 

Coronavirus banking: customers first

An unexpected lockdown had a huge impact not only on the economy, but also on the people. Customers had to change their habits, as they were encouraged to stay at home and use online services. Many people followed this advice out of concerns of contracting the virus. This tendency could be seen in banking industry – in April, 82% of customers feared to visit branches. At the same time, 63% of respondents were more inclined to try digital banking apps.

A recent report published by Deloitte confirms that trend. According to the data, almost 20% of all retail banking customers have used at least one online service for the first time during the crisis. What is more, majority of those “debutants” decided to use apps and digital tools more frequently – more than 50% of them declare to use a mixture of traditional and post-coronavirus digital banking, while 14% of them switched to online tools for good.

According to the Data collected by LiveBank platform for remote communication, the number of online interactions with customers increased by 17% (1H 2020 / 1H 2019) with the highest impact in the 1st quarter with resulting in 30% increase (1Q 2020 / IQ2019).  This clearly proves that LiveBank is a useful customer service tool for online processes widely used as a part of post-coronavirus banking. Its features enabled the banks to perform operations without the participation of physical branches. This system also allowed customers to manage their services and use new ones, such as opening account (eKYC), activation of internet and mobile banking, change of credit card limit.

Habits changing the banking industry

Looking at the latest data we have no doubts that customers’ needs and habits have suddenly changed. Such a transformation is a huge challenge for every bank, but it is also a unique opportunity for growth, as many people are looking for new tools and solutions they can use regardless of the circumstances. According to Deloitte, each of online services mentioned in the research, including pensions, investments, loans, or even mortgages, attracted first-time users to digital banking platforms. This shows an enormous potential that is hidden in a new generation of financial software.

– The latest changes in banking platforms, such as LiveBank, can offer banks much more than they may expect. Innovative solutions, including digital communication channels and remote onboarding based on eKYC technologies, can help organizations both acquire new customers and provide the existing ones with top-notch services. This is an advantage that cannot be overlooked in this business. – says Bartłomiej Szymański, Senior Business Consultant at Ailleron.

Many customers who preferred branches over online solutions, now will switch to digital services and remote support  Recent statics provided by our LiveBank platform have shown an increase of video connections in the period of lockdown (March – April 2020). The share of video connections was tripled, reaching 15% of all the inquiries. This was caused mainly by necessity to verify a customer via video for high-risk processes, opening new accounts and consulting financial advisors. Thus, it can clearly be seen that post-pandemic banking relies mainly on digital resources and connections.

Online banking platforms can also help prevent further financial damage to the banking industry. Closed branches and limited customer service processes caused significant losses. All the largest banks in Poland only lost up to 38% of their value, while the entire industry in the country experienced a 40% decline of profits in the first quarter of 2020 compared to the data from previous year[1]. In the time of coronavirus online banking was the only remaining tool that could stop the sudden falls from happening through providing customers with sufficient services wherever they were. Now it will be hard for them to visit the branches once again, especially when another coronavirus outbreak may be just around the corner.

Inevitable transformation?

Overwhelming majority of respondents claim they intend to use online banking to some extend or competently switch to online services. Thus, there is no doubt that the customers are ready to embrace digital changes, even though some banks are not ready to offer them what they need to manage their finances from home.

However his crisis is a perfect opportunity to tailor online banking to customers’ needs and attract them to a set of new, low-cost communication channels. LiveBank is one of them – it’s an omnichannel platform that uses various service model to meet the needs of larger group of customers, .Itis also a perfect choice for financial advisors serving their wealth management portfolio mainly in the branch.

Such solutions can help banks create a unique customer experience based on the mixture of in-branch and digital banking. Seamless integration of those tools and key processes are necessary for financial institutions to generate profits regardless of the circumstances – and we can already see this transformation happening.

Any questions?

Need quick hints? Feel free to contact us

Piotr Skrabski

Piotr Skrabski

General Manager

    Ailleron Company

    43B Jana Pawła II Avenue
    Podium Park II Building
    31-864 Cracow

    Did you know?

    A virtual branch will work perfectly wherever efficient service is crucial