Online Banking Surge and COVID-19

There’s no doubt that the coronavirus pandemic has impacted almost every aspect of life as we know it. As it relates to banking, the physical limitations have impacted how most customers would usually perform their ‘in-branch’ transactions. However, and thankfully, this has acted as a catalyst to the digital channel adoption to a much-needed society like ours. According to American statistics published in NextAdvisor, there was a staggering 200 per cent jump in new mobile banking registrations a year ago, accompanied by a 50 per cent drop in branch bank traffic. Research in the UK also shows that online transactions accounted for around 60% of total transactions, up from 20-30% pre-crisis, while in Germany cashless point of sale (PoS) transactions rose from around 40% pre-crisis to 60-70% in April according to discussions with banking organizations. I believe that here in T&T, we may have experienced similar statistics.

Banks the world over, have emphasized the importance of utilizing their digital channels and promote social distancing as much as possible for stubborn ‘in-branch’ customers. Regardless, success will subsequently involve finding the right balance between building deeper banking relationships with digital customers while persuading branch customers to take advantage of digital capabilities. This is no easy task and bridging that gap can make all the difference. For example, last year Republic Bank, while meeting customers at their point of need, noticed the high influx of branch customers wanting to register for online banking. As such, we implemented a simple and hassle-free process whereby customers can do so via WhatsApp or FaceTime and they loved it.

Over the last year, many financial institutions improved their web channels by personalizing experiences through self-selection navigation, targeted online banking communication and robust FAQ content and features. This allows for greater harmonization of your digital channels and will ultimately lead to customer retention and satisfaction. No one predicted the grave negative impacts of the COVID-19 pandemic, nonetheless, customers are being forced to use digital channels and may look unfavourably on banks whose systems feel slow, cumbersome or overly complicated. Republic Bank Limited has ensured customers using remote channels have a positive experience both during, and beyond the crisis.

Augmented by online banking there are personal financial planning and accounting apps for your computer or mobile device. Through these apps, you can keep a ledger of all of your banking transactions, compile budgets, and group expenditures to get a profile of your spending habits. With all the added benefits of online banking, security is always cited as the major concern by thousands of users. For their part, online banks have extremely sophisticated security systems in place and a common method is to use two-factor authentication. When you first log in you’ll have to identify that particular computer or mobile device as your trusted access point. You will have to set up answers to security questions and anyone trying to access your accounts from another device will have to provide the answers to the challenge questions you previously set up. This added security allows for more trust among your digital channels as fraudsters are constantly thinking of ways to scam customers and undo the hard work of financial institutions.

The future of the branch is not just about prime property. In an ever-changing world, where consumer disposition for digital and omnichannel adoption fluctuate for various reasons, mainly due to demographics, the best strategy will be relationship-driven. Regardless of the increased use of technology, with branches largely unavailable, maintaining connectivity for customers is key and we have seen banks do this, using apps, emails, website messages, digital signage and even SMS and telemarketing to speak directly to customers’ needs.