Banking

Relationship lending involves regular contacts between a bank and a customer over time, so the lender can understand the customer well enough to provide a tailored credit solution with little risk. During times of crisis, relationship lending is mutually beneficial and may be increasingly employed as the pandemic’s full impact transpires.

If bank branches seem emptier these days, it is because a majority of staff are working from home, heeding COVID-19 restrictions. And most of them prefer the WFH arrangement. Banks have had to implement a number of operational changes to accommodate the WFH model, balancing employee health with productivity and accountability concerns.

If anything prompted agility, it was the pandemic. Most banks surprised themselves by how agilely they responded to the immense changes required in record speed. Celent’s Model Bank virtual event brought banking professionals together to discuss the importance of agility in banking, what makes a bank agile and how it can become more agile.

The enforcement of environmental-crime legislation is evolving in the UK—and the pace is set to quicken, with inevitable implications for financial firms and investors. Increasing enforcement sophistication and AML risks, focus on supply-chain due diligence, and ESG and regulation are three ways in which risk is changing for the industry.

Nonperforming assets weigh down any bank but are particularly burdensome for those in emerging market economies. South Korea, in response to the Asian Financial Crisis of 1997, took steps that provide a blueprint for banks facing different circumstances but similar challenges today.

Crises inspire metamorphic change, and that’s happening in banking as we trudge through a pandemic. Can banks do more than boost their digital transformations—and bottom lines? Can they be the foundation of building back better? It starts in the community, providing services to everyone, without regard to race, gender, economic status.

Financial inclusion has not yet been fully achieved, especially in developing countries, leading to lost prosperity not only for individuals and SMEs but economies. In Nigeria, FirstBank has tackled the problem through innovative measures, including its agent banking network Firstmonie, which succeeds in including the previously excluded.

It’s no secret that SMEs play a significant role in the UK economy. As of 2020, there are 5.9 million SMEs in the UK, contributing about 50% of its GDP. It goes without saying that the pandemic has put SMEs in a precarious position. Empowering them to grow again will be vital to the UK’s recovery – they hold the key to our GDP, the job market and to their communities.

Fraud inevitably produces innocent victims. With fraud continuing to rise in the financial industry, especially that tied to the skyrocketing adoption of ecommerce, regulations such as Europe’s PSD2 are being sharpened and unleashed to combat the threat. But the regulations themselves bring challenges to all concerned, from merchants and customers to banks, with uneven impacts. How can banks prepare themselves to confront fraudsters while continuing to serve honest customers seamlessly?

Banks need to meet customers where they are at, which today means social media. Personalisation, accessible solutions and relevance are key to reaching Millennial and Gen Z consumers, and banks must amend their strategies to serve these generations of bankers. By aligning their goals with those of social media, banks can stay in the loop.