The future of banking post COVID-19

Prior to the COVID-19 pandemic, you may have visited your local bank’s branch a couple of times a year. With the sudden outbreak of the coronavirus, almost everything came to a standstill. Countries around the world went into lockdown, ultimately forcing organizations and people to adapt and ride the wave of digital services.

After all this, it’s unlikely to find people eager to stand in line at banks, without thinking twice about the risks of being in a confined public space. While the COVID-19 is making the need for digital banking more urgent, consumers’ growing preference for digital services is not new. Neither is the frustration with incomplete digital journeys that consumers frequently encounter when attempting any online processes.

The COVID-19 pandemic is likely to spur high-impact digital journeys in the banking and finance sector that will transform the industry as we know it, to ultimately deliver new and simplified experiences for customers. While it’s too early to predict the full impact of COVID-19 on the world, here’s what we think banking may look like in a post-pandemic world.

1. Consumer banking

Before the pandemic, some people were already relying on the convenience of digital banking and e-wallet options to manage their payments and overall finances. During lockdown though, some consumers were forced to make the switch to rely on digital banking for the very first time.

It’s clear that COVID-19 has caused a major shift in consumer behaviour as more people began to recognize the efficiency of 24/7 banking whereby, they can easily open a bank account online, perform transactions, make digital payments, and pay their bills without having to go into a bank. With this accelerated behavioural shift, we can predict to see several trends where consumers may rely more on contactless payments, credit and debit cards, as well as mobile payments.

The future of banking might as well also be defined by COVID-19’s impact on global unemployment rates. With a number of organizations shutting down and people losing their jobs fuelled by economic uncertainty, consumers will cut back on spending and focus more on saving money for the future.

In a world where the only thing that remains constant is change, consumers will search for banks that offer them more transparent, simple, and customised experiences to protect their finances and their future.

2. Mobile banking

With many banks forced to temporarily close their doors during lockdown, naturally this caused a surge in mobile banking usage which is likely to stick around. This spike caused financial institutions to wonder if this widespread adoption will lessen footfall in their branches. Whatever the case, this is an opportunity for banks to differentiate themselves at all points of their customer journey to retain and even acquire new customers.

Today’s consumers are different; they want more control, efficiency and better financial health. Mobile banking isn’t just for consumers to manage their money on the go, the spectrum is wide and can be anything from opening an account at home, paying bills and even investing in term deposits or getting loans.

With people living in a rapidly changing environment, banking services will have to be much more integrated and accommodating to their consumers’ lifestyles and needs.

3. Digital-only banks

Although people have been relying on digital financial services during the coronavirus pandemic, this doesn’t mean that we’ll say goodbye to traditional brick and mortar banks anytime soon. We’ll see banks embrace digitisation, innovation and disruption to provide consumers with digital experiences that complement the brick and mortar experience.

In 2020 and beyond, banks are expected to provide diverse customer service options where consumers can contact and interact with them remotely through different digital channels from email, social media to phone calls and real-time chat. With an increased focus on customer experience, banks will work hand-in-hand to provide consumers with the power to take charge of their finances and see where their money is going at all touch points.

4. Contactless payments

In the pre-pandemic world, contactless payment adoption was quite slow. In the post COVID-19 world, we can anticipate the future of contactless payments. With consumers more weary than ever in catching the virus, they’re now more open to contactless payments that will have them simply and safely wave their card over a point of sale (POS) to make a purchase.

Contactless payments actually free consumers from having to touch germy surfaces. Better yet, the transaction process is simple, quick, convenient, and effortless. Most importantly, consumers will be able to track their purchases on the go through their mobile banking app as they move away from traditional cash payments to digital payments.

So, how do contactless payments really work anyway? There are several methods of doing this. Debit and credit cards are now fitted with chip that can be read by simply waving the card over a point-of-sale (POS) machine without the need to enter a PIN code or sign any receipts.

Companies mobile phone moguls like Apple, Samsung and Google have found ways to integrate payments through their own e-wallets; Apple Pay, Samsung Pay and Google Pay. You will be asked to scan your bank’s credit or debit card using your phone camera and from there POS machines can process transactions by hovering your phone over the machine. This can keep you from handing over your card to vendors and avoid anyone seeing your card details.

According to a consumer study conducted by MasterCard in March this year, 70% of respondents in the Middle East and Africa (MEA) region said they now use some form of contactless payments for safety and hygiene purposes with 81% saying they will continue to use contactless post-pandemic.

This surge can eventually lead to the end of the era of cash on delivery, with more youthful and tech-savvy generations entering the financial world as consumers, the growth of contactless payment is only inevitable. Banks will be forced to provide consumers with safer and more digitised services to keep up with global trends and needs.