Banking

COVID-19: Navigating the impact on commercial banking

April 14, 2020

In brief

Commercial banks are at the epicenter of COVID-19’s economic storm, working to help businesses stay afloat while ensuring their own service continuity.
Yet, many banks struggle to respond to the influx of calls from small and mid-sized businesses anxious for quick credit and other financial relief.
Accenture recommends banks consider actions across four key areas to help both them and their customers endure and emerge stronger after the crisis.

Banks and all businesses are hunkering down to safely and soundly keep operating in light of the COVID-19 pandemic. But many small and mid-sized businesses are particularly vulnerable. Banks are seeing a huge ramp-up of requests from them for help in staying afloat and cashflow positive. At the same time, many banks are working to stabilize their own operations with more liquid workforces and robust digital channels to address the demand. Given the volatile impact of the crisis, there is no time to wait.

Four key ways to manage now

Accenture is supporting commercial banks in responding to the call, addressing operational capacity and readiness challenges to quickly provide the credit advice and solutions their customers need today—without taking on undue risks. We offer guidance on what commercial banks can do now and next across four key operational areas that are demanding their urgent attention.

Enable clients to maintain operations

Much higher demand for new or modified business credit is putting great strain on many banks’ lending operations, particularly as banks themselves work in new ways in the COVID-19 era. To free up the constraints and add agility, banks should draw on technology and process innovation to:

Create a fully integrated command center as the single point of coordination of the bank’s crisis-related action
Build a scalable capability where customers may more easily and quickly access funding

Help businesses access financial support

Small and mid-sized businesses may need the most help to lower costs, ease debt obligations, maintain working capital and stabilize supply chains. Banks can help by:

Extending leniencies, such as moratoriums on funded facility repayment
Offering customer-specific products, such as discounts, waivers and business interruption insurance
Providing digital loans
Strategizing on new business opportunities and value propositions

Digitize commercial banking offerings and automate processes

The health crisis is compelling many businesses, and thus commercial banks too, to move more of their banking interactions from "assisted" channels to digital offerings. Both can reap cost and productivity benefits in the short and long term, if banks manage to:

Map changes to the customer journey to existing digital offerings, using what’s already in place (even on the retail side of the bank) and shoring up any gaps
Establish a technology steering team to take technology-enabling actions and integrate with broader IT
Partner with others to quickly get digital credit origination running at scale

Proactively monitor portfolios to shield credit quality

While making access to credit simpler and adhering to governments’ credit mandates, banks can look out for their business customers and themselves by keeping close tabs on the health of credit portfolios. Key actions to take now:

Segment and identify loans based on their future credit risk to better manage them
Create a digital place for businesses to get quick answers and solutions
Embed data and analytics tools and AI into credit portfolio management functions

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Coronavirus & commercial banking: emerge stronger

Surviving through and thriving after the health crisis will be a lengthy journey. We believe good can—and will—come out of it for those taking right action, right now. Hopefully, this bit of insight helps you to quickly and wisely think about and plan your bank’s immediate and next steps—the swift support you provide to your small and mid-sized business customers can go a long way to strengthening these relationships. We are here to help in whatever business capacity you may need to emerge stronger.