“What are the lessons intermediaries can learn from 2020’s volatile year? Stay close to your clients and master volatility through new technology”… Nic Dreckmann, Julius Baer’s COO & Head Intermediaries.
Last week, I started the year, not with new year resolutions, but on using the lessons learnt over the past decade and especially the year 2020, to move on with our banking journey. I believe that new year resolutions should not be made in a vacuum. One should always relate it to the past and improve one’s self from there. As quoted last week, some of life’s best lessons are learnt at the worst times. Winston Churchill also said that we should never let a good crisis go to waste.
The Need for BCP Re-evaluation
In the midst of the Covid 19 pandemic, Bank of Ghana directed all banks to activate their Business Continuity Plans. (BCPs). This Directive from the central bank was received with mixed feelings, especially when banks had to deal with an unprecedented event which has no solution or estimated period of elimination, and worst of all, lockdowns. There was a rush for laptops and tools for staff who would be working from home, identification of what services are critical. COVID-19 has reshaped our world and redefined how nearly every organization conducts business. Human Resource Directors are working hard to ensure all employees have what they need to work under “business unusual”. No one could have predicted the current economic state, so chances are most business continuity plans did not include a section detailing what steps to take when the office buildings are completely shut down and all employees are forced to work from home. As a result, revisions should be made now to business continuity plans to update them.
Training should not stagnate. Personnel who are responsible for staff training should prepare a comprehensive employee training package for both virtual and physical training. The training should include policy, procedure, and compliance. In unusual times, the blame game becomes intense when risks, near misses or losses occur. This is not the time for staff to say they did not know. Training in both virtual and physical platforms are now a must-have. Webinars and video-conferencing are now a must-have for easier and fast decision-making.
Relationship Banking should Never be Compromised
We are not in normal times, and for us in Ghana, there is a completely new BCP. There may be trial and errors to localize some plans to suit our environments. However top of the priority lists is to continue to engage customers virtually through various means of communication. This is the time that Relationship Officers should be regularly connecting with customers. Technology that supports personal relationships is key in this game. You must be in a position to interact with your clients in a technologically advanced way.
This is the time customers using analogue phones should be guided to move to smart phones to facilitate digital banking without fear or concerns of hacking. Some are slow learners, and this is their time to learn. Many illiterates and senior citizens have huge investments elsewhere. These little things will eventually encourage them to divert some of their funds to your bank. Do not forget my usual quote that “Banking is a Feelings Business”.
It is Not Time to Stop Selling
The recovery process from Coronavirus and its economic impact could take months. Connect with your current clients and ask how they are doing. Get a feel for their business right now and assure them that your services will offer,(a), or be available for (b), or that your products and services are currently unavailable until at least (c). Whatever the case might be, it is important that you keep your current clients in the loop. Do not stop prospecting. Many banks are quick to inform their clients about the disruption of certain products and services, but unfortunately not quick enough to inform clients when services resume. Please take note of this. In this day of easy account opening and multi-banking on various banking apps, it is very easy to switch accounts and stay with the new bank for good!
Staying Relevant in The Branch Space
Accenture’s research into what human characteristics were vital in yesterday’s and in today’s American banking space is interesting. It was noted that the focus in yesterday’s banking space was on being service-focused, procedural, re-active and hierarchy-driven. On the other hand, they found that today’s market space focuses on being digitally-savvy, open and communicative, customer-oriented, results-driven, advice-focused, teamplay, energetic and self-motivated. Dear Managers, are you and your Team sharpening your skills to focus on these modern requirements, although some may only be partially true? There has been a lot of discussion in the industry about the future of the branch. There is no arguing that branches are expensive, and many players have even argued that they are no longer relevant in a “digital world.” However, branches represent an opportunity for banks to differentiate and build loyalty with their customers. This can be through great, advice-driven experiences with frontline staff. There are several benefits of moving frontline staff from transactional to advisory positions. Bank branches now have less transactions and rather need more expertise. What customers now need is guidance and advisory services.
Career Counselling and Transitioning
The banking and finance industry is constantly changing. Ongoing education is a necessity if you and your team want to stay current on the latest skills, technology and information required to be successful. However, banking leaders realize that even in a perfect world, they will not be able to retrain all of the employees that could be displaced by technology. As a result, there should be alternative options for helping those employees. The cultural implications of wholesale reductions can be massive and career counseling services are needed to help people with the transition.
Risk & Governance in the Digital World
Enhanced training in the risks in digital banking is a must-have. In the digitized world of financial services, new kinds of risks are abundant. Various risks associated with identity fraud, cybersecurity and regulatory compliance could potentially threaten bank’s control over customer experience. Increasingly, banks will need to improve on differentiating real from fake customers with the use of digital platforms. The potential for cyber risk has also been increasing with the greater interconnectedness and utilization of new technologies in the banking ecosystem.
Lessons in governance of credit risk
Going forward, banks’ have become more proactive in identifying and provisioning Non-Forming Loans (NPLs), and endeavouring to preserve the independence of their risk management functions. These factors will be decisive in determining a bank’s ability to support the real economy and ultimately survive this crisis.
Technology and Cybersecurity
According to the PWC August 2020 report, themed: “The new normal- banks’ response to covid 19”, 50% of bank executives/respondents indicated regular review of the performance and security risks of their electronic platforms as a standard procedure performed. COVID-19 therefore did not necessitate any changes to their review process. Other banks however were mostly concerned about the adequacy and capacity of their electronic banking platforms to avoid or reduce downtimes in operations. Past experience about sensitivity of customers to unreliable electronic services meant additional investment was required to provide robust substitute for the reduced banking hours. The need for secure virtual private networks (VPNs) and the smooth interfacing of banking applications with other tools for remote working to ensure data security also topped the discussions. 19% of the respondents were concerned about their workforce’s knowledge on cyber security and tools for remote working as the banks increased reliance on digitisation for internal operations. This gap was quickly filled with virtual training and workshops for all staff.
As banking products change with technology, we hope this is regularly factored in risk management practices across all banks, since fraudsters are patiently waiting to identify gaps and loopholes to sink their teeth into.
So, while I know these times are nowhere near “business and usual,” let’s do our best to continue doing great work in the areas we can control.
TO BE CONTINUED
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations ethics and fraud.
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