We all know that the COVID-19 pandemic outbreak has reshaped society, business houses, and the global economy. Like most organizations, the retail banks have witnessed an emergency need to reshape their working ethics and ways. The pandemic outbreak has accelerated customer behavior shifts and created immense challenges in revenue generation. Most retail banks are under massive financial stress for business houses and customers.
Michael Giannulis throws light on the situation
The total revenue decline might align with the current economic downturns. Also, the revenues after the risk might witness a steeper decline. According to McKinsey’sCOVID-19 impact model, the projects can drop between 16% to 44% in Western Europe. Also, customers are changing their banking performances. Going by the same impact model in the U.S, Spain, and Italy, around 15% to 20% of the consumers surveyed get anticipated to maximize their online channels when the crisis is over. In other markets, the percentage is likely to be between 5% and 13%.
Michael Giannulis points out that several banks are yet witnessing this change in mindset. It could be because of restrictions in online capacities. If this emerging preference becomes the next normal for the banks after the pandemic, the retail banking distribution will witness three years of online preference acceleration this year. When you compare this with chosen markets, it indicates about 25% of lesser branches. The online services and sales will also speed up, and the private advisory channel needs to come of age for managing 35% of the complicated requirements remotely.
Rethinking revenue-generating tactics
Both consumer relationships and revenue growth will also come under the scanner. And when that occurs, the banks might need to rethink their revenue-generating drivers and opt-in for brand new opportunities for brand launches. Banks can use high-end analytics to recognize important niches for judicious growth, but that needs to get added with online sales and marketing transformations. Many banks anticipate various potential plays for inorganic growth, which adds a complete-scale retail bank that lacks the balance-sheet mix to be successful independently.
It is also possible that retail banks reinvent their strategies to manage risk and consumer assistance solutions. It helps cater to their societal purpose and reduces credit impairments compared to the 2008-09 global financial crisis. Here the progressive credit models can get re-engineered for maximizing accuracy, making use of real-time transaction information. It can also reflect the government initiatives, by sector, territory, and customer segment. Also, resolving credit impairments might need data-oriented triage to isolate between the borrowers that might grow and are witnessing temporary challenges and the ones that are structurally impaired. All these segments will need a customized resolution to heal from the pandemic after-effect. Read more- Free Youtube Channel Art Maker.
If retail banks want to succeed in such a crisis environment, they need speed and smart strategies. In the past few weeks, the banks have moved and made progress faster than one could have imagined. The retail banks responding to such trends with an agility that they developed during this crisis will emerge as winners and get equipped to function better in the coming days.
