It was inspiring to see how small businesses responded to the new and changeable restrictions in place due to the coronavirus pandemic. They adapted quickly to help customers in new ways, demonstrating their versatility, creativity and tenacity.
While banks were initially held back by regulation and legacy infrastructure, in crisis mode they accelerated digitalisation plans and joined forces with third parties to deliver essential solutions to their customers as quickly as possible. Priorities and budgets were shifted overnight to provide the best possible customer experience. It was far from easy, but the pandemic helped banks find the motivation they needed to future-proof their processes and solutions through collaboration.
According to research we commissioned last November, the pandemic caused 58% of banks to change their IT infrastructure plans. In collaboration with fintechs and specialist providers, banks have been able to deliver new digital accessible solutions to meet the needs of their retail and corporate customers. Now, looking ahead to what 2021 holds, the new challenge is to ensure the innovation and collaboration that became necessities in 2020 become the norm, not a passing phase or memory.
We spoke to 300 C-suite decision makers at banks across the UK, DACH (Germany, Austria and Switzerland) and Benelux (Belgium, the Netherlands and Luxembourg) to discover the specific challenges they face in future-proofing their organisations and enhancing customer propositions. Published in a whitepaper, ‘Better business banking: Collaborating for success’, the research reveals that existing IT infrastructure is the biggest internal challenge holding banks back from achieving their business objectives.
A few other key take-aways from the November research:
- Lack of integration with customer-facing departments was a key issue for 40% of banks
- High customer expectations is the most common external focused difficulty faced by banks with 39% saying this was one of their top three challenges
- Working from home operations, an area where Covid-19 has changed priorities for individuals, businesses and banks across Europe, came in a close second, with 38.7% of banks placing it in their top three
Unencumbered by legacy systems, the new cohort of fintechs have been able to serve consumer and corporate customers efficiently and at low cost in many areas, often competing with traditional banks. But the incumbents have not stood back and accepted defeat as inevitable; instead, they have been changing their business practices, culture and technology to remain competitive and provide the solutions their customers need for today and tomorrow.
Building for the future, together
Now, more than ever, banks need to find cost-effective ways to support corporate customers whatever the future post-pandemic world brings. That support needs to be convenient, accessible and, above all, valuable. Solutions must be investment light yet deliver strong innovation flexible enough to meet rapidly shifting expectations and needs.
Last year brought an increasing trend towards collaboration. Now, to meet the evolving business needs, collaboration must be embraced to bring benefits for all sections of the financial services sector. Through partnerships with infrastructure providers banks gain the agility and innovation of a fintech, while fintechs gain compliance and security processes, enabling them to focus on building strong customer relationships.
Now is the time to reap the benefits. In the face of unprecedented challenges, banks stepped up and set a new precedent for future-proofing banking. And that must be the legacy of 2020: better business banking.
To register for the new Banking Circle whitepaper, visit bankingcircle.com/whitepapers.