Summary Bullets:
- Efforts to bolster online banking and fintech apps in response to the COVID-19 crisis can significantly advance the digitalization of banking.
- To help banks weather the COVID-19 storm, it is essential that they continue developing a supporting IT infrastructure that maximizes flexibility, agility, and efficiency.
Global banks currently face multiple challenges as a consequence of the COVID-19 crisis. However, it is vital that banks remain committed to ongoing digital transformation strategies. Many major banks have recently embarked on digital transformation journeys that involve the adoption of cloud-based IT architectures, fintech solutions, and the use of emerging technologies like artificial intelligence (AI) and blockchain. Although the COVID-19 crisis has created short-term disruptions to banks’ normal operations, banks should prioritize the continuation of key IT transformation projects with a focus on their long-term benefits, including cost savings, operational efficiencies, increased business agility, and the ability to leverage new tools and capabilities.
Collaboration between central banks, policymakers, and regulatory authorities over the past decade means that banks are in a stronger position to deal with major emergencies compared to the 2008 financial crisis. Nevertheless, the disruptions caused by COVID-19 are far-ranging and include reduced demand and delayed payments from customers, less liquidity from government due to the need to finance deficits, and reduced income due to lower interest rates. Banks have also had to rapidly rollout new systems and processes to enable the majority of their employees to work remotely and to ensure that banking business continues in virtual and contactless ways. The prioritization of online banking services and fintech apps has raised its own set of challenges, including the need to raise awareness and inform customers about the range of digital services offered and how to use them. They also include ramping up call center support and ensuring that adequate IT capacity is in place to handle spikes in online service usage. And although IT and data center personnel are recognized as ‘key workers’ who need to travel to on-site locations, the work of banks’ IT teams has also been disrupted by lockdown travel restrictions and employees choosing to, or having to, self-isolate.
Nevertheless, the accelerated push that banks have been forced to make in order to bolster online banking and fintech apps represents a key advancement in the digitalization of their business. It is likely that, for many banks, digital will become the new norm once the crisis has passed, with banks investing in a broader range of digital banking offerings that encompass consumer and business lending as well as the application of intelligent automation to mortgage and life insurance products. But, it is also essential that banks continue to build up a supporting IT infrastructure that maximizes flexibility, agility, and efficiency. Recent months have seen several major banks, including Bank of America, Lloyds, Standard Chartered, Santander, Banco Sabadell, and TSB, announce plans to leverage private, public, hybrid, and multi-cloud solutions to improve IT efficiency, reduce costs, and enable the introduction of new digital services. Other banks, including HSBC, Citibank, and JPMorgan Chase, are investing in emerging technologies such as blockchain and AI to unlock additional benefits. Banks should prioritize the momentum with these major IT projects to strengthen their resilience during and after the COVID-19 crisis.
IT Connection 