Why doubling down on the customer experience is key in a global crisis

Banks in Mainland China and Hong Kong have demonstrated over the last three months that their experience of SARS in 2003 and their respective business continuity plans (BCPs) enabled them to keep operating and serving their client base while complying with government-imposed restrictions on the public and on businesses.

Unfortunately, the COVID-19 situation differs significantly from the SARS experience, both in magnitude (a global pandemic affecting all supply chains) and timeline. Despite the best efforts of the government and society to eliminate COVID-19 as quickly as possible, we expect it will take longer than the typical bank’s BCP horizon of six months. Banks will have to consider the sustainability of the measures they have introduced.

Banks require more at this time than business continuity planning

This means that financial services firms in Greater China will not only need to extend many of their emergency activities but altogether rethink the way they operate and serve clients (especially the processes and transactions that require paper documentation or physical presence). This is true for all business lines and clients, from large corporations to small and medium-sized businesses and from wealthy clients to the mass retail market.

Naturally, the bank’s priority is to secure financial health and defend the existing client base. Mid- to long-term zero and negative interest rates, as well as a shortfall in fee income from reduced economic activity, will force financial institutions to manage their cost with precision and speed. But a cut in spending across all bank activities will risk delaying or even preventing the important new solutions and capabilities intended to help overcome the impact of the COVID-19 crisis.

Hence, we suggest that banks reprioritize their funding, shifting the focus to projects and initiatives that maintain or improve the customer experience (CX) while at the same time reducing or eliminating additional cost.

Plan for mid- to long-term COVID-19 scenarios

Reprioritize budgets and investments

Redefine the customer experience

Expand data analytics usage

Proactively reach out to clients

Partner for speed and impact

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The foundation for doubling down on the customer experience is, the bank's analytics capabilities

These enable it to leverage all available digital channels for customer information and engagement and to employ intelligent automation to eliminate manual effort, create paperless processes and journeys, and introduce virtual agents.

To address their BCP priorities while simultaneously looking to enhance the CX, financial institutions should consider changing from an inward-facing risk-focused approach to one that leverages external specialists who can help augment and accelerate the necessary actions. This will enable them to meet the immediate demands of the crisis while building a foundation for the CX they will need in the future.

The current situation requires what is key in any crisis: analysis, information, proactive communication and swift action. This applies across all of the bank’s large corporate, SME and retail clients, but the steps are executed in different ways.

Whereas co-creation with large corporations is important for building trust and meeting specific requirements, proactive analysis and outreach are also key for SME customers. Intelligent automation and digital operating models allow advanced banks to do the same for their retail customer segment in a scaled, cost-effective way.

Plan for mid- to long-term COVID-19 scenarios

Review budgets

Rebalance the allocations for "run and change the bank" while eliminating shortfalls in CX and risk.

Execute a data-driven approach

Use it to understand customer challenges and needs. Combine internal and external data with industry expertise to develop scenario simulations.

Improve elasticity of credit management process

This includes regulatory and government initiatives to help businesses survive the COVID-19 aftermath.

Redeploy capacity and expertise

Strengthen agility and impact within banks where it matters and to enable employees to work remotely and improve customer service.

Develop digital advisory and lending capability

It is important when address new business opportunities driven by global supply chain disruptions.

Increase cyber security

Enhance the fraud analysis and detection activities and advise customers proactively on these topics.

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With a carefully orchestrated approach, these crisis management actions can accelerate bank transformation into truly digital organizations.

We define a truly digital bank as a data-driven and agile organization that continuously seeks to improve its customer experience through business ecosystems and leveraging next-generation operations.

Flexible work models

In addition to investing in the customer experience, banks need to swiftly get their workforce ready for remote working, enabled by technology and powered by the right mindset and culture. It is essential that they not only invest in tools but forge new levels of trust, empower the workforce with decision making, create a culture of resiliency, and position their business for growth and productivity in the future.

Three things are key to achieving this:

Elastic collaboration

Use multilayer collaboration tools to enable staff to work remotely whilst cultivating the requisite mindset through education campaigns.

Insight-driven reallocation of the workforce

Utilize big data analytics to optimize workforce effectiveness by informing allocations and prioritizing activities based on customer and business needs.

People-first approach

Foster a purposeful and engaging culture. Effective remote teams require more intentional practices to drive alignment and program execution.

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The COVID-19 pandemic is a catastrophe with damaging impacts across the personal, social, commercial and economic dimensions. Banks have no choice but to respond, to defend not only their own solvency but also that of their customers.

While addressing these immediate imperatives, however, it makes sense to keep an eye on the future. There is much banks will learn from COVID-19, which will force many of them to move more decisively into digital. These lessons will inform their wider-scale digital transformation initiatives, helping them develop more engaging customer experiences that will underpin their growth once the world has recovered from the pandemic.

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