April 30, 2020
There is a global race for innovation, and banks in the retail industry have already joined this tech race. Banks are aiming to upgrade their banking infrastructure to improve their agility and enhance their competitiveness. The race to figure out what works the best in digital-only formats has just got intense with the economic impact brought on by the outbreak of COVID-19. The global health crisis has underscored the value of technology. A sudden change in terms of work, financial activities, and consumption patterns are all creating a lasting impact. So what are some of the leading banks doing to counter the COVID-19 setbacks?
The impact is perceived as one of the most severe economic setbacks the world has ever seen after the Great Depression of the 1930s. This “perceived” impact may become real if the predictions by various credit rating agencies prove right. For instance, Fitch Ratings expects the world’s GDP to decline by 3.9% in 2020 and calls it “a recession of unprecedented depth in the post-war period.” Fitch expects the Eurozone GDP to decline by 7%, the US by 5.6%, and British GDP by 6.3% in 2020. Moody’s also predicted that the G-20 economies will experience an unprecedented shock in the first half of 2020 and expects G-20 real GDP to contract by 0.5%.
Almost all the entities, including FinTech companies and neobanks in the financial services industry, have taken one or the other measures to mitigate the risk and impact brought on by the global pandemic. Some of the typical measures pertain to cash flow and workforce. We have covered these developments in our recent article 6 Interesting Moves by FinTechs to Fight Coronavirus Setbacks. In this article, we cover some of the recent strategic COVID-19-related developments in the retail banking industry across both private and government banks around the globe. We have categorized these measures into the five areas listed below:
The competitive landscape in the retail banking sector is constantly evolving as consumer preferences are also evolving; and, it is imperative for the banks to keep themselves abreast of the innovation as almost every banking process and service is getting digitized. This need for digitization brings in both opportunities and challenges in terms of pressures to cope with the innovation. For the large banks that have economies of scale and t ...