Banking

Much has been written about how retail banking has appropriated digitalisation to improve customer experience and gain market share, but investment banking has also adopted digital processes to step up their performance and market share, largely in response to shifting client demands and snowballing competition from alternate providers. As their monopoly hold on investment banking withers, what do incumbents need to do to stay in the race as the frontrunners?

Frontline banks are fluid, responding to and better yet anticipating customers’ evolving requirements and preferences. The pandemic has accelerated the need for banks and consumers to interact with each other through digital channels. To compete in an increasingly competitive market, traditional banks must provide tailored solutions, cooperating with specialized partners to achieve specific goals. Banking-as-a-platform has become the new norm in the industry and the only way to keep up.

Crises bring out the best in humans, and that has certainly been evident during the COVID-crisis, especially with banking, which has risen to the challenge more successfully than many expected. Sustaining the momentum post-pandemic will be critical, as economies struggle to recover. To remain robust and profitable, banks will need to pay particular attention to key areas such as transforming costs and reimagining customer relations, aided by talent and innovations.

The pandemic has upended traditional banks’ sales models and forced them to accelerate their transformation to digital and omnichannel sales. Despite social-distancing measures, a recent study by Simon-Kucher & Partners reveals alarming figures: 40 percent of bank sales continue to be carried out in person because end-to-end online sales are available for only a limited number of financial products. The marketing consultancy offers recommendations for revamping the digital customer journey.

For the world’s economy, 2021 hasn’t yet brought a break from 2020; COVID-19 remains dominant. Although all banking systems are vulnerable to upheaval, the situations for those in emerging markets are more tenuous for several reasons. S&P Global Ratings examined the three major risks facing a sample of 15 EM countries, including likely deterioration in asset quality, geopolitical and domestic policy uncertainty and vulnerability to abrupt changes in investor sentiment.

Open Banking originated half a decade ago as a European and UK consumer-protection regulatory initiative but has evolved into a popular technological concept. To give consumers more choice and data control, banks share their financial information, after receiving their consent, to third-party providers via APIs. The technology brings benefits to customers but also risks, so the Open Banking process must be carefully upgraded to find its promised place in banking.

Throughout their long history, banks have sustained the smooth functioning of economies, but their effectiveness depends on the quality of their leadership. So, what makes a dependable chief executive or board member? The right attitude is a good start, as are applicable skills, foresight, ideas and a determination to cooperate with other key players. Now more than ever, strong and visionary leaders are the fuel that ignites profitable banking practice.

Much attention has been paid to the financial fallout of COVID-19 in the banking industry, but not as much to the emotional toll on managers and staff. Senior bankers have the technical know-how to weather the coronavirus crisis, but they sometimes lack the soft skills needed to steer an institution through choppy emotional waters. How can they build those essential soft skills at a time when they are desperately needed – and what will that new focus mean for the future of executive training?

The Czech Republic’s MONETA Money Bank fully employs digital channels to meet its clients’ needs and expectations while ensuring that its customer experience is “enjoyable”. The pandemic has caused the bank, like many others, to dig deeper into its digital treasure chest, but fortunately, MONETA was better prepared than many to face COVID-19 challenges. In his interview, CEO Tomas Spurný described this innovative bank’s impressive navigation skills through rough waters.

Rapid leaps forward in cross-border payments have led to significant reductions in processing times. This is great for customers but also leaves windows of opportunity open for cybercriminals, such as money launderers and fraudsters. The responsibility to remain compliant with financial-crime regulations weighs heavily on banks as it becomes more complicated, but the SWIFT network is going all out to help in the effort to ensure swift but legal transactions.