Times have changed, and so has the way we bank!
By: Kalindi Mishra
Banking will truly never be the same. But how could it be anyway? When such a profound and extensive health crisis transpires, realignment of practices are in order.
To avoid infection during the pandemic, more and more banks are now implementing in-person operations for limited hours each day of the week.
COVID-19 era nuances have irreversibly redefined the relationship between patrons and their respective financial institutions
The gross shift in transactions conducted in 2020 have established a foundation for a highly digitized banking landscape.
“What we’re seeing is the greatest acceleration of digital banking in history,” observed Wells Fargo securities analyst Mike May,“ What’s taken place over the last few months may have taken place over two or 10 years” if the pandemic had not come along.”
A catalyst, in the process, are also the widely available low interest rates in addition to reasonable annual percentages.
Such incentives serve as motivating factors for some to commence a relationship with banks
While modern technology lends numerous benefits, the disadvantages cannot be overlooked, especially the risk of financial theft.
Hence, bank and credit institutions alike are keen to heavily invest in vital protocols to bolster and maintain the overall cybersecurity of patrons in the online realm of banking.
Such inclinations are corroborated by the 2020 Financial Services Global Outlook Survey conducted by Deloitte Center to document the opinion of major bank titans. Approximately 71 percent of these leaders are proposing the implementation of a systematic cybersecurity budget with specific fund allocations, including but not limited to, cloud storage and data privacy rounding as the main areas of enhancement.
However, the 2020 incident rate is lower than that of 2019. About 1,056 cases of compromised consumer data were reported in the year of 2019.
Given that 61 percent of reported incidents consisted primarily of bank and credit union transactions, it becomes apparent that a vigorous yet functional security plan to ensure a smooth infrastructure of operations for the future.
Some of the most well-reputed banks in the country, such as the U.S. Bank, Fifth Third Bank, and Bank of America showcased high incident rates.
Millennials and Generation-Z consumers account for ¾ of the consumer population that indicated strong intentions to separate from their current financial institution in light of the pandemic related dissatisfaction in operations. During the pre-pandemic era, they only constituted 14 percent of this particular subgroup, now the statistic has increased to 27 percent.
As an industry rooted in human trust and communication, banking is now resorting to establishing remote ecosystems in order to maintain existing engagement.
89 percent of Chase customers agree with the 85 percent of non-Chase consumers on the efficiency, which online banking has afforded them, as per the Digital Banking Attitudes Study Chase, carried out with the support of 1,500 participants. Every 8 in 10 people utilize a smartphone or other devices to perform financial transactions.
It turns out that 70 percent of Chase customers and 60 percent of non-Chase customers are confident in the security features built into the commonly used mobile banking apps.
On the other hand, 10 percent of Chase customers in conjunction with 14 percent non-Chase consumers find commonality in the hesitancy to fully turn to digitization.
Further discussion reveals that three-quarters of Chase patrons express a desire to continue using electronic payment options in the long-term future, indicating a definite shift in mentality.
Allison Beer recognizes the variability of preference customers have in banking: “We already have a segment for our customers who bank exclusively digitally with Chase. That said, branches are still important to our customers and many visit their local branches to interact with their bankers and advisors. When consumers choose to bank with us, they do so because we give them options to bank where and how they want.” she says
Consumer engagement should remain the primary focus of all prospective protocols and strategies, especially in the uncertain and equally challenging era of COVID-19 for the purposes of financial management.
Seamless digitization is present on all widely used mass platforms, namely, apps, email accounts, and other forms of social media.
Simplicity and ease of usage are key factors for current and future success in the financial industry.
COVID-19 has excellently highlighted the respective advantages and inherent disadvantages of all financial services in the span of a year.
While some organizations have already acclimated to new technological advancements in business practices prior to the pandemic, adaptation and further re-prioritization of goals took place throughout the course of the pandemic. Agility is essential for continued success in the financial sector, whether merchant, banker, or consumer.