During the COVID-19 pandemic, banks’ clients have changed their behavior overnight reflecting adaptations to restrictions and health and safety requirements. As a result, a rapid surge is been observed in the digital opening of new relationships, registration & usage of mobile payment applications, and usage of contactless payments accompanied by the reduction in physical client meetings. This has also urged the banks to evolve and transform their digital business models rapidly, with new circumstances. Now the banks are required to make the provision for a large number of credit facilities, adapt offerings in support of clients’ needs, introduce fast, flexible, and effective measures to keep operations and services stable.
The experience has helped organizations in identifying the transformational capabilities of digital channels and operational setups, as well as the need for new value creation from data and analytics. Let’s explore some of the digital innovations that can lead the banks through the current crisis.
1. Fraud Prevention
COVID-19 pandemic caused an increase in cyber frauds; however, with the help of powerful technologies, it can be minimized. Artificial intelligence (AI) with its real-time data analytics, can act as an early warning system to prevent credit card frauds. It has the capability to evaluate the probability of fraud, and upon the suspicion, enables to take immediate request for client feedback to clarify the legitimacy. Not just that to minimize the loss from fraud cases, Adaptive analytics through machine learning can be applied by continuously reintroducing client feedback into the data model.
2. Core Banking Services
Banks invest heavily to add value for clients, by applying advanced analytics to their portfolios and offering related tailored products, investments, and advisory services. To ensure better customer service, banks can evaluate a client’s feedback with the help of digital solutions. On top of that, digital solutions and data analytics can also be used to increase the relevance and efficiency of client communications and personalize financial services as per the clients’ needs.
3. Operational Efficiency
The surge in new relationships and the use of contactless payments during the pandemic had also increased the need for operational efficiency. In banking a large number of documentation packages are prepared for client meetings, so with the blend of the distinct data element and robotics process automation, the client documentation can be generated from management tools and archives at a high frequency. The operational efficiency can also be enhanced with the help of Optical Character Recognition (OCR) which allows intelligent classification of incoming emails along with embedded meta-data and delivery to a digital mailbox.
4. Regulatory Compliance
The rising frauds during pandemic had made it difficult for banks to comply with regulations. However, when it comes to compliance with legal and regulatory requirements, data analysis can be very helpful. Machine learning can detect deviations in client and transaction profiles. Additionally, when the needs of the client are large and complex, it involves a high level of operational risk like Anti-Money Laundering (AML)/Know Your Customer (KYC) checks, in such cases ML tools can be applied to identify issues and enhanced interactivity/visualization to translate data into insights. It also helps an organization in reducing risks and ensuring compliance with the regulations.
Apart from helping the banking system in serving customers efficiently, preventing fraud, and driving operational efficiency, digital innovation is essential to address the issue of remote working too. The pandemic has forced the banks to set up themselves to be digitally amended to reflect remote working, communication, and client service, which is leading to an increase in the number of remote working arrangements. Technology no doubt will assist the banks in the best possible way.
Banking is a metaphor for trust in society, now is the time for banks to demonstrate its stewardship, digital innovation can lead the banks efficiently though this unexpected disruption of a pandemic and post-pandemic economy. You can also reach out to us for exploring digital applications that can help in your banking business.