There is much debate about the impact of Covid-19 on the economy. A lot of it is estimation and conjecture based on imperfect data. The discussion is dominated by whether we will have a U-shaped recovery, or if it will look more like an L over the next few years—and what policy decisions will drive the outcomes.

However, regardless of policy or recovery timeline, it is clear that consumer and small business behaviours will change dramatically during and after this crisis. Without an alternative, consumers get on with their lives, bank in the way they always have, and business continues to get done; however given a compelling reason, in this case physical restriction to “normal” ways of doing things, people will begin to unfreeze old habits and move to digital channels and remote ways of engaging.

In response, banks have to act now—before new customer habits refreeze in a way that is detrimental to their business. They must:

· Help customers by supporting them when, where and how they need, enabling personalised experiences and offering advice that they can access digitally

· Provide employees the tools and resources required to successfully serve customers remotely, and with flexible schedules that can meet demand

A significant moment – unfreezing of habits

This is a significant moment for banks. In a time where consumer and business habits have suddenly unfrozen, banks have the opportunity to step up and become more engaged with their customers, guiding them through these uncertain times. The critical elements in these interactions will be personalised experiences—enabled by digital and data, with a helpful person exactly when needed. Those that act and adapt in real time will be rewarded with greater loyalty, new customers, and better performance when behaviours refreeze in a new mold.

Along with opportunity, the unfreezing of habits also presents a tremendous threat. Consumers and small businesses will question the value that a bank brings to them. More than half of consumers already say that they would be willing to bank with non-traditional players like Google or Amazon if they provided the service. And over 60% of the emerging affluent say they would consider switching their primary bank. Those that don’t engage with their customers in an effective, personalised way now will be forced to play catch-up later, hoping they’re not too late.

Help customers by supporting them how they need, enabling personalised experiences and advice that they can access digitally

The Covid-19 crisis has pushed us to an extreme end of the spectrum in understanding what consumers and businesses are willing (and have capability) to do remotely. Prior to this, many financial institutions would have said that people doing 30%-50% of their transactions using digital was very good. In the past month, that view has changed dramatically, as customers are doing more transactions using digital. Today, this behaviour is driven by the fact that they can’t go to a branch, and contact centres are currently overwhelmed with long wait times. Tomorrow, it will be driven by a more personalised journey—before, during, and after the transaction—that gives consumers more confidence in the engagement and makes it more convenient. Think back to something as simple as depositing a cheque at an ATM. In the early days, printing an image of the cheque on an ATM deposit receipt dramatically increased adoption of ATMs over tellers for cheque deposits; it gave people confidence that the cheque had actually gone through.

The modern version of this is a bit more sophisticated. Banks must build an understanding of the customer, ethically weaving together internal and external data with a layer of artificial intelligence that can help detect patterns of what individuals actually want. They must engage those individuals using the right messaging and channels—and then deliver a seamless and lightweight experience for the transaction that puts the customer at the centre. When needed, a remote adviser should also be available—someone who has the context of the customer’s experience thus far and can assist, going forward. We’re seeing leading banks rolling out pilots of these concepts right now.

Provide employees the ability to serve customers while they work remotely, and with flexible schedules that can meet the demand

The crisis has also shown us how unprepared the financial services industry is to work remotely. On the retail banking side, many firms have had to cut call centre staffing dramatically due to the close proximity of the representatives’ desks. This, coupled with the tremendous increase in call volumes, has resulted in long wait times and poor service interactions. However, many leaders in the space have, quite literally, been able to flip a switch and bring up significant work-at-home service teams and managed to keep up with demand. They have matched their capacity more closely to the demand and are getting real kudos from customers.

In wealth management, some firms have literally had movers come box up equipment and phones from the office and deliver them to advisers’ homes because of regulatory and compliance requirements on the equipment and infrastructure. Others, however, had the cloud-based technology infrastructure already in place so advisers could conduct fully-compliant video conferences and phone calls, securely access customer accounts and conduct transactions, and serve clients in this greatest time of need without putting themselves in harm’s way.

Ironically, the new cloud-based and flexible infrastructure that enables the new ways of working are actually easier to manage, maintain, and scale up in times of need.

Whilst it’s true that old habits die hard, the unprecedented events of the past few months have forced consumers and small businesses to ‘unfreeze’ their traditional habits. Depending on how it’s addressed, banks have a tremendous opportunity or significant threat on their doorstep. Customer habits will be in flux for a short period, as they understand and work through what’s available, and then those habits will ultimately, freeze again.

During this period, banks must move quickly to become valuable to their customers through personalised experiences that are digitally-driven, but enabled through actual people when needed. They must also build supporting capabilities and cloud-based infrastructure for their people so they can work remotely and in flexible hours to meet customer demand. These technologies are all available and we are putting them to use today—all indications are that this crisis and the opportunity and threats it presents has the potential to transform our industry.

Views are personal. The author is senior managing director, Publicis Sapient.

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