Written by </strong></em>Anders la Cour, co-founder and CEO of Banking Circle</p> Even before the global COVID-19 pandemic caused one of the biggest disruptions of all time, banks have been changing their business practices, their culture and, most of all, their technology to create more responsive and flexible businesses that centre customers’ requirements and experience. </p> Research commissioned by Banking Circle, and undertaken by Magna Carta Communications during the first few months of the crisis, examined how attitudes to digital technology have changed, particularly around the cloud and outsourced provision of commoditised banking services like payments. The potential impact of government stimulus policies and the relative strengths of banks compared to other players in the finance ecosystem were also analysed.</p> The survey and interviews involved senior executives from a range of financial institutions across Europe, and feedback showed industry-wide optimism for the future. A substantially different picture from a decade ago.</p> 2020 vision?</strong></h4> Many financial institutions looked forward to 2020 as the hopeful dawn of a successful new decade. Sadly, the reality has been very different. 2020 has dealt a cruel blow to this optimism, presenting us with a rapidly changing landscape and horizons we cannot see clearly. However, it is both exciting and encouraging to see how the value of digital has taken on new and immediate significance during the crisis.</p> Survey respondents and interviewees confirmed that the businesses they represented already had plans in place to digitise more processes. However, many confirmed that these plans had to be fast-tracked due to the crisis, demonstrating the need for organisations to be adaptable, agile and prepared. COVID-19 has certainly proved to be an accelerator for change.</p> Dean Wallace, Payment Service Provider ACI’s Practice Head for Real-time and Digital Payments, said: “There has been a move to digital channels over traditional call centres, for example, that was already underway for most customers. The pandemic has accelerated that process, making it less gradual.”</p> Santander’s Head of Financial Industry Transformation, Juan Jiménez Zaballos confirmed that digital transactions and app downloads were already increasing, pre-COVID, and that video conferencing tools are likely to affect the way some banking services are handled: “Digital service was already the new norm. Now it’s imperative. Anything without a digital expression is not going to remain as it is, especially when it relates to large numbers of retail clients.”</p> The picture is similar at Weavr.io, as Alex Mifsud, the fintech’s Founder and Chief Strategy Officer commented: “It’s accelerating a trend that has already started, from deep digitisation of payments process, to the entire supply chain.”</p> However, Thibault de Barsy, Vice-Chairman & General Manager at the Emerging Payments Association (EPA) EU warns that COVID-19 is too blunt an instrument to affect change: “I don’t see much enthusiasm for the idea that COVID-19 will force change to digital. Change is really driven by making the customer experience smoother.”</p> Challenges to change</strong></h4> Change has taken place at different rates in different regions and among different countries. EPA’s de Barsy added: “The biggest problem for digital solutions in Europe is that it is not a truly unified market. It’s not even about cultural differences. We’re talking about basics like regulation and tax.”</p> Paul Le, Chapter Lead Trade - Data & Platforms, at Danish bank, ING, commented: “The best chance to succeed is an extended channel where clients and banks can interact, and customer experience is high, and the process is efficient. Banks have to re-think their infrastructure, how to make data flow work better.” </p> As Elliott Limb, Chief Customer Officer at Banking-as-a-Service platform provider, Mambu, put it: “Digital means building for what individuals need and building for an unknown and unpredictable world.”</p> Building futureproof post-pandemic banking</strong></h4> When the survey and interviews were carried out for this study, in Spring 2020, the long-term consequences of near universal remote-working and socialising during lockdown had not yet filtered through into the responses. However, the pandemic has so far created a solid evidence base for the efficacy of working digitally, alongside an equally strong evidence base of the need for human interaction. </p> Understanding how and where human interaction fits into a digital model and determining which services should be digitised, will be critical in the future. As Santander’s Zaballos said: “We’re going to see a real statement of values in general and as a society. Human touch will be treasured. Solidarity. Empathy.”</p> As the world makes its way out of the pandemic, and crisis-mode, banks must take time to understand the future, use the lessons of the past – including those learned during this pandemic – to determine longer-term thinking around the infrastructure that enables success. </p> In the process, everyone can regain the clarity and confidence that 2020 originally offered and see it as a time that lay the foundations for a bold new collaborative, accessible and future-proof financial ecosystem. </p> Banking Circle has published the results of its study in a series of three white papers, which are available to download here.</strong></a></p>