Forrester: 6 ways COVID will change banking

As the COVID-19 pandemic alters the world, financial services are reacting in turn. The tech-focused market research company Forrester recently reported in “ The New Unstable Normal: How COVID-19 Will Change Business and Technology Forever, ” that the effects of the pandemic could be permanent. In the short term: 1. Consumers will continue to gravitate toward cashless payments, and banks will focus on their digital and mobile customer experiences. In April, neobank startup Upgrade accelerated the launch of its contactless payment solution amid the pandemic. And in Q2, Bank of America saw transactions on its peer-to-peer payment platform Zelle hit $32 billion . 2. Cash deposits will flow toward incumbent banks from fintechs as consumers see banks as “stronger and safer” institutions for weathering the pandemic. Citibank tweaked its online channels throughout the pandemic and gained 270,000 new digital accounts for existing customers, as reported by FinAi News . In the medium term: 3. As customers continue to embrace digital channels while lockdown orders remain in place, banks will move to create digital channels that focus on the customer experience rather than the product in order to set themselves apart and avoid “digital sameness.” Citibank experienced year-over-year mobile user growth of 13%, and a 25% increase in mobile and online logins since the start of the pandemic, according to the bank. The bank increased the mobile check deposit limit for new customers and launched one-time password authentication for international numbers to increase customer engagement with mobile. 4. Tension between privacy and security will escalate as banks look to create more personalized tools for customers, requiring them to share more personal information than ever before . As consumers move toward digital channels, and fraudsters follow suit, the financial services industry is looking to new technology to stop criminals. A recent TransUnion study highlighted an 11% increase in “risky” transactions worldwide in financial services since March. In the long term: 5. Automation and the use of artificial intelligence will power the next generation of online banking as financial institutions look to become more data driven. Nearly 77% of executives in the industry agree that AI will separate winning banks from the losing ones. TD Bank’s AI assistant, Clari, has seen its traffic double since the start of the pandemic. 6. With the rise of automation and personalized customer experiences, customers will become wary of sharing too much information with their banks. Financial institutions that can anticipate customer needs and create digital tools accordingly, without damaging customers’ trust, will thrive in this environment. Even before the pandemic, HSBC released a report in November predicting the future of banking will lean on personalized experiences that draw on banks’ understanding of customers’ financial life. FinAi News Build , which takes place Sept. 9-10 as a virtual experience, is a must-attend industry event for professionals overseeing financial technologies, product experiences and services. Register here .

Forrester: 6 ways COVID will change banking

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