Covid-19 continues to send shocks through the world economy creating huge challenges for corporate banks. It still poses a significant test to commercial and corporate banks' operational, reputational and business-model resilience. Travel restrictions, social distancing and reduced consumer spending have had an immediate and dramatic effect on the cash flows of many businesses. As a result, banks are flooded with requests for commercial and corporate loans and for implementing government policies to provide financial relief to SMEs and corporates.
How banks respond to these financing needs will have a major impact on the economic consequences of the crisis, including whether companies survive and continue to employ staff. As we all adapt to these new realities, one thing is clear; customer-centric banks are tearing up their 'business-as-usual' plans. They are recognizing that existing processes will not be sufficient to support customers through the crisis, or to facilitate a rapid and sustained recovery.
Corporate banks need to reimagine their post-crisis future. Here are 5 actions they can take now to boost the resilience of their own business model, minimize wider economic damage and protect their employees and customers in the "new normal".
1. Shift to a digital-first model
Covid-19 has already changed corporate customer behavior, it made a shift to a digital-first model essential. Businesses now expect banks to deploy enhanced digital tools and capabilities to meet their urgent priorities. Whether these high value customers need loan or mortgage payment deferrals, lines of credit, loans, or credit cards, they expect a rapid response, including access to an advisor to discuss and access the available options.
2. Boost remote-working and hybrid-working capabilities
In the past months, remote working became a necessity. In many ways, this has been positive and many banks now feel there is no going back to the 'old normal'. Indeed, research from Gartner suggests that 600 million employees will be remote working in some form by 2024.
That's 30% of all employees worldwide and represents a 13% increase over 2019. Creating such hybrid work practices, that balance employees' needs with data security and business success, will depend on accelerating the development of digital tools to support new ways of working. For banks, that will include branch automation that covers everything from customer account information to streamlined back-office systems for all transactions, loan and account origination, financial planning and transfers.
3. Touch-less digital journeys are the new norm – make sure you're ready
An omnichannel business model is now the new normal within the corporate banking industry. To be truly successful means banking platforms and processes are well-connected. They must provide a seamless omnichannel experience for customers, no matter which channel they use or switch to throughout their journey. In the end it must be all about creating the best "experience".
Corporate customers use mobile and internet banking more often now. But without a doubt, many customers will continue to visit branches. They may require face-to-face meetings that adhere to all the Covid-19 safety precautions. In the new normal, branches will be digital and dynamic physical spaces. What's needed is to turn traditional branches into "digital branches": an agile, experience-led, digitally-enabled places that are empowered with convenient technology where customers will do everything digitally except touching cash.
Customers' in-branch interactions will involve touch-less, end-to-end digital journeys that start from appointment-taking to digital signatures, sending emails as receipts to reaching out to customers with surveys on mobile for feedback. This will add a "human touch" blended with convenience. It will also increase speed and efficiency and reduce burden on employees at every level.
4. Explore chat to chat banking
Instant messaging and chatbot are becoming commonplace across many business sectors. Increasingly, corporate banking customers will expect to connect with an advisor from the comfort of their own home. For example, a customer may choose to check their loan eligibility and payment terms using chat to chat banking. They may then use the chat function to schedule a virtual call appointment with their advisor before going to an in-branch meeting to finalize the details. Chat to chat banking is not just for straightforward transactions; it can facilitate a seamless sales journey, starting with the chatbot and ending at the branch.
5. Use technology to manage credit risks
This economic crisis is likely to have serious implications for banks' non-performing loan (NPL) ratios. Acting now to anticipate the coming wave of troubled loans will allow banks to respond quickly and sensitively, rather than firefighting. A digitalized end-to-end loan platform helps banks to automate the entire process, from loan origination to credit decision-making and digital collections, ensuring a cost-effective yet customer centric approach.
Over the last 10 years, virtually all corporate banks have moved the majority of their routine transactions to digital platforms. However, before the pandemic, many business customers were still using face-to-face channels for more complex problem solving and financial advice. Most will continue to need and value that human interaction. The common thread among corporate banking leaders will be the agile and strategic adoption of digital platforms that sit alongside a customer-centered mindset and approach.
If you would like to receive more ideas and updates on the latest developments in corporate banking, please subscribe to our blog.
Would you like to find out more? If so, get in touch with us!