Banks to strengthen resilience, accelerate transformation in 2021
Banks should institutionalize the lessons learned from the pandemic, strengthen their resilience now and accelerate their transformation in the post-COVID-19 world, a study by Deloitte said.
The pandemic has accelerated the progress of technology empowerment and digital transformation in China's banking sector, and boosted the trend of online retail banking.
Nearly 80 percent of respondents agree that COVID-19 has uncovered shortcomings in their institutions' digital capabilities and some 95 percent said their institutions have already implemented or are planning to accelerate digital transformation of services to maintain operational resilience over the next 6-12 months, according to the survey.
Empowered by technologies, banks can develop a more precise profiling of micro and small enterprise customers. Online microfinancing and banking products for small businesses have become very popular, with customers able to confirm credit lines in a few minutes.
Leveraging a fully digital process, business network transformation and mobile service terminals, banks can provide more convenient lending services to customers.
Although uncertainty remains, bank leaders should not hesitate from reimagining the future and making bold plays, Deloitte noted.
Banks are expected to build a new playbook by strengthening resilience now and accelerating their transformation in 2021.
This can include operating with agility, flattening hierarchies, speeding up decision-making, empowering employees and introducing flexible workplaces and workforces.
“In terms of transaction volume, the online-to-offline ratio is 1.5 times higher than it was before the pandemic and has been increasing since pandemic controls became the new normal," says Jason Guo, Deloitte China Banking & Capital Markets sector leader.
"The pandemic is having a long-term effect on technology empowerment and sales transformation in the banking industry. Acceleration of online business development is set to substantially change the industry landscape, and we look forward to it."
COVID-19 has not only accelerated digital adoption, it has also been a litmus test for banks' digital infrastructures, according to the report.
Institutions that made strategic investments in technology will come out stronger, but laggards might still be able to leap ahead if they take swift action to accelerate tech modernization. In many institutions, digital inertia has faded; there is now more appetite for technology-driven transformation, especially in core systems.