Implications of COVID-19 crisis on the Banking and Financial Services sector
The coronavirus pandemic has led to the deterioration of operating surroundings, decreasing productivity, increasing asset risk, and low capitals in the financial sector. With most of the sectors slowing their business processes, BFSI sector is an exception that is playing a key role in stabilizing the economy. Ensuring business continuity to undergo normal operations has been for the banking and financial companies’ top priority amid the COVID-19 crisis.
The impact of coronavirus outbreak is having a severe impact on the BFSI sector including factors like shrink in revenue and profitability impact. We have jotted down a few concerns for the BFSI organizations based on three time-periods – immediate, short-term, and medium-term:
- Disruption of the workforce: Continuous lockdowns and sickness have resulted in the shortage of workforce. Due to this, the on-duty staff needs to undertake different tasks apart from their usual activities which require cross-functional training. Additionally, the workforce is suffering from fear and mental weariness. Solutions include:
- Enabling staff to work from home through remote collaboration in this crisis
- Addressing routine queries with the help of bots and Interactive Voice Response (IVR) systems to allow staff to focus on new/complex tasks.
- Influencing staff behavior with the help of digital apps and protect their health.
- Digital councils to engage staff with professionals to meet their wellbeing needs.
- Surge in call volume: Traditional infrastructure for call handling is inadequate and leads to fear and uncertainty. People prefer to talk to humans with comfort in the conversations. To address this situation, solutions are:
- Customers are assured continuous service with video/audio messages
- Bots help in managing routine and outward calls
- Applying remote call management to manage the spike in staffing demand
- Losing customer confidence: Diminishing customer trust and confidence can have an adverse impact on the bank. It is essential to engage with your customers at quick intervals to:
- Retain customer trust and infuse confidence as banking staff communicates with them time-to-time via video messaging, web/mobile apps, etc.
- Dedicated Relationship managers are assigned to contact with the customers through video conferencing.
- Global recession possibility: The pandemic has resulted in the recessionary environment globally.
- Service providers must develop data analytics and AI/ML-based prediction models to discover their customer segments that are supposed to default.
- Implementation of new digital business models can ensure optimal capital expenditure within the limits.
- Digital Maturity: Some of the banking services are unavailable on digital channels. High bandwidth requirements for these channels result in a lack of services. To manage this:
- Enterprises need to assess their digital capability to identify the specific tasks related to the customer and shift it to online platforms.
- Facilitating data-light digital channels.
- Bots for managing disruption in service, monitoring performance, and managing response time.
The financial sector is having such implications on IT services and technologies. To come out of this critical situation and give the best of the services to their customers, BFSI companies are entering into partnerships with Technology Service Providers (TSPs) that can enable:
- Identifying and preparing for new risks with data analytics and insights solutions
- Making business information and services of banks available with automation and business process reengineering
- Facilitation of video banking with conferencing solutions
- Dealing with the bulk of call volumes with the help of artificial intelligence in banking based backed tools and conversational platforms
Service providers are being constantly updated with the current trends in the business sector amid COVID-19 with the help of Draup’s sales intelligence software. This one-fits-all application provides critical information that helps TSPs create top-notch financial and insurance-based technological solutions. BFSI companies eyeing for such new-age solutions to serve their customers can have a long-term mutual business partnership with the TSPs.