It is common to record changes in business performance as a result of unforeseen situations. Such will be the case for this COVID-19 pandemic which has directly affected over 2.6 million people across the world and has already resulted in the death of over 180,000 people. A lot changed overnight, with businesses and organizations required to change the way they conduct business.
On March 9, 2020, the World Health Organization (WHO) suggested people turn to cashless transactions to halt the spread of the virus, a piece of advice many governments and businesses acted upon.
In Ghana, for example, one of the first steps we took was for banks to step up the provision of digital banking alternatives for customers. Mobile money transactions were also made cheaper and more flexible by Telcos. As a result, transactions that could be handled online have been moved online.
In addition, working from home, which many employers dread due to possible productivity loss has become routine with employees also having to adjust to a new work culture. There will be enough time to focus on the future of banking post-COVID-19 but it is reasonable to already start some discussions on what the future has in store.
According to Victor Asante, the Managing Director of FBNBank Ghana, many of the changes caused by the global pandemic especially to business operation and regulations should become the new normal after Coronavirus pandemic.
“Why would banking move back to the pre-coronavirus mode of operation when the potential for digital transformation has had such a significant lift? Why would a bank require a customer to visit a branch to complete routine transactions like account opening or loan application? Why would a customer want to revert to old ways of conducting banking transactions after experiencing the convenience of digital channels?” Mr. Asante asked rhetorically.
He projected that “banks will implement their digital strategies ahead of their timetables and remain committed to the new methods in order to stay relevant in the banking and finance industry. The cashless economy agenda has been handed a great opportunity for accelerated implementation. The crisis of COVID-19 is too good an opportunity for the cashless agenda and this in all probability should not be wasted.”
Banking transactions on mobile applications and other digital channels have increased significantly due to the pandemic. For instance, in the United States, time spent on finance apps increased by 35% between December 2019 and March 2020 according to Liftoff (a Mobile App Marketing & Retargeting Company) while E-commerce increased by 25% between January 2020 and March 2020 according to Forbes Magazine (a global media company, focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle).
This validates the result of the 15th March survey of 1,000 customers by Lightico, a technology firm with a focus on digitally transforming the connection between businesses and their customers. The result of the survey was that about 60% of the customers were more inclined to try a digital app. Similarly, the usage of blockchain payment apps has also increased. Everywhere in the world, coronavirus is expected to cause monumental growth in the use of mobile money transactions.
Mr. Asante believes that other payment channels aside mobile money will also record increased usage and will become more integrated into the payments system. Also, he thinks other aspects of banking such as relationships, retail banking and marketing may alter significantly post the COVID-19 pandemic.
According to him, “digital transformation powered by artificial intelligence (AI), which makes high level of personalization and real-time information dissemination a key part of product development, innovation and marketing will receive a huge boost”.
He, however, cautioned against challenges that could emanate from the digitization process, especially fraud. The report of TransUnion’s global fraud and identity solutions division showed a 347% upsurge in account takeovers.
In this regard, the MD of FBNBank acknowledged that as digital channels increase, so will the routes and opportunities that will be available to fraudsters.
He, therefore, admonished banks and banking professionals to concern themselves with fraud management and prevention.
He posited that “as banks transform technologically, fraudsters become more sophisticated. Therefore, as the industry is adopting faster and more convenient channels, banks now more than ever require potent fraud management strategies to stay ahead of the fraudsters”.
Cyber security’s place in banking and finance has just shot up to number one on the risk agenda. The issue of cost of business is another area he commented on, drawing attention to the fact that banks would have to accelerate spending plans on digital platform roll out “as the issue has moved from just being a competitive advantage to that of health and safety”.
Digital platforms used to be about banking convenience, but now all of a sudden it is also a health issue. He also reckoned there will be strict regulation and supervision to match the times.
“This too shall pass,” concluded Mr. Asante, quoting the now very popular phrase.