Post-COVID: The Next Wave of Digital Transformation in Financial Services

Post-COVID: The Next Wave of Digital Transformation in Financial Services

Financial services leaders from across the country gathered in a virtual roundtable to discuss the role of digitization in a post COVID work environment. Operations executives from renowned banks, lenders, and credit unions shared their experiences and observations around the challenges and solutions for the new demands on their business. Here is what they discussed: 

What challenges are financial institutions facing during COVID-19?

1. Reduced hours and the risk of a remote workforce
The banking industry is just like any business interrupted by this COVID crisis. Banks have closed branches, reduced opening hours, and many are struggling to securely track their back-office employees as they work remotely.

2. Transaction overloads and improvised workarounds
Despite the lockdown, financial institutions are seeing an increase in activity.  Although many reports say the economy is slowing down, financial institutions now have to manage a slew of relief options while still maintaining regular day-to-day operations. With the PPP loans, MSLP program, mortgage payment suspensions, credit program offerings, and federal stimulus checks, businesses and individuals expect financial institutions to quickly process loans, provide payments, cash checks, and transfer funds. What’s more, the economic stimulus relief failed to help financial institutions prepare internally for such a large-scale initiative.  It’s reported that many people are still waiting on digital deposits and business loan approvals, leaving financial institutions struggling to handle the influx of applications and evolving demands.

3. Old manual processes, new nightmare
Manual processes have always impacted operations, but now it’s severely impeding operations. Paper and manual processes have been long ingrained into many financial institutions. Many long-standing institutions imagined they would have plenty of time to update and digitize and there was no hurry to implement the right tools to ensure their processes would continue in a crisis such as the COVID-19 pandemic.

4. Existing technology isn’t enough
To put it plainly, even the newest technology isn’t enough during this crisis. Financial institutions that upgraded some processes still find bottlenecks, especially when connecting to needed personnel data. Even though a banking customer may have access to digital forward-facing processes, the back-office operations of many older institutional banks have not yet caught up to their customer-facing technologies.

5. Spreadsheets are riskier than ever
Because of its familiarity and ease of use, Excel is still the data tracking system of choice despite leaders knowing it’s inefficient and error-prone, so much so that a Forbes contributor has even opined that it is the most dangerous software on the planet. In fact, because of this epidemic, some financial institutions conducted risk assessments and discovered their old applications and processes are a bigger risk than they originally thought. It is interesting to note that even in 2020 there is still trepidation in digitizing processes. Despite reports that cloud computing is more secure than many on-premise data center environments, the news of data breaches may be the cause that some still consider it a risk. Because of this, innovation comes in the form of assembly line data entry or adopting single process RPAs, but far too often these solutions do not scale.

Overall, financial institutions are struggling. Mobilizing back-office operations with limited laptops and managing manual processes that have no automation has been a challenge. Although many are making it work, they all agree that this sudden change has not been an easy process.

 

“It’s like we’re fighting fires. There is no magic wand to create something over a few days.”
 – Sr. Process Improvement Advisor with a regional US bank of over 260 locations

 

As these institutions receive mandates to offer better solutions, maintain operations, and manage an increase in business all while trying to transition a brick and mortar workforce to be mobile and efficient; those that have been dragging their feet on innovation are finding out that digitization is not just nice to have, it is now a must.

So, how do banks manage manual processes, emails, spreadsheets, and old legacy systems that are not feasible during this crisis? 

Most financial institutions recognize the need for digital capabilities with seamless, fast integration. The need to quickly adjust to changing processes or policies is essential and made easier with the adoption of cloud software and third-party services. In fact, several authorities have pressed financial institutions to consider the overload resulting from the increased use of online banking and remote working arrangements, urging them to coordinate with third-party service providers to ensure continuity of business.

As banks are shifting processes to better manage the pandemic, operations managers must keep moving forward. There is a fear that an uphill battle will ensue to keep the new changes and implement more digitization, insulating them from future disasters. 

“Many people in the office think that this is temporary.
They think it will go back to the way it was, but that isn’t good for business.”

Business Solutions Manager at a privately held state bank

 

How can these professionals prove to their teams that continuing to digitize and automate processes will help them weather the storm of future crises?  

Financial service companies like Stearns, First Guaranty Mortgage Corporation, and American Express have trusted the security of low-code applications to manage the digitization of their operations and praise their adaptability. With the need to implement solutions immediately, financial institutions are quickly turning processes into applications creating big wins in record time. With the right low-code platform, the applications can grow with your organization, giving unprecedented peace of mind from any future crises.