Digital banking is changing the financial industry forever and it seems like the trends kicked off by the ubiquity of the smartphone and apps is only getting faster during this unique economic time period.
In fact, the Sydney Morning Herald credits the novel coronavirus and the pandemic with speeding up the digital banking revolution by years all by itself.
From grocery shopping to luxury goods to services, the move to paying for everything online couldn’t be clearer or more abrupt.
The trends in the industry
And while some naysayers are trying to pigeon hole these changes and say that these new practices will fade once the pandemic lifts, others point out that the growth in virtual IBANs and the increasingly global nature of society points to a different trajectory.
Deputy chief executive of the ANZ Bank Alexis George told the newspaper, “I think that movement towards digital is not going to go away and with people feeling comfortable with doing more major transactions online, I think we can expect that to be a permanent change.”
NAB’s chief executive Ross McEwan was quoted by the Sydney Morning Herald: “Permanent change, in my mind, has just been made in 10 weeks. It would have taken us another five years. …I think very few shops will go back to actually offering cash services. Supermarkets’ staff wouldn’t handle it. They don’t want to touch cash anymore.”
Market website The Financial Brand notes that the transition to digital and online payments has been so seamless for consumers that many have not noticed any delay or interruption in the operational efficiency of their banks.
The website does also note that the growth in the popularity of digital banking and virtual IBAN cannot be taken solely as proof that the business model is the future. The website notes that consumers tend to bank wherever and whenever they can.
That said, the unique efficiencies offered by digital operations for both consumers and businesses means that the industry has hit a turning point and the digital revolution is likely to rule the day from here on out.
The coronavirus shaking the status quo
But COVID-19 doesn’t just present growth opportunities. The industry needs to pivot and change with the new surge of customers it has experience.
Finance website Finextra outlines the digital banking industry’s tasks in a post-pandemic world quite clearly, “COVID-19 is likely to spur a widespread and systematic revamping of high-impact digital journeys in the banking sector, such as customer onboarding and product origination, to deliver a truly outstanding digital experience to their customers. In the near future, we are also likely to see more digital banking apps offering a streamlined and simplified user experience, designed to reduce barriers of digital and financial literacy. This will open up digital banking to customer segments that are less technologically savvy.”
In other words, digital banking and virtual IBAN will have to bridge the gap between technical know-how and banking needs. The industry cannot expect consumers to adapt to it as the first group to cater to these unique consumer needs will have a marked advantage over the rest of the field. That said, with so much about digital banking still in its nascent stages it could be easily argued that everyone is still figuring out what works – post-pandemic or not.
As we can see from the recent situation with the Wirecard case government regulations and auditing standards tend to gain new levels of more strict measures for digital banking firms. This of course, can only be taken as a portion of good news for the end customers using the services of the latter.