Igor has spent over 15 years helping business owners to navigate and achieve their strategic objectives using progressive technologies. Being a technology enthusiast, he has kick-started and has been involved in the development of hundreds of web and mobile applications, fintech platforms, and digital ecosystems. He specializes in artificial intelligence, cloud solutions, and future-ready fintech product development.

The far-reaching humanitarian consequences of the coronavirus outbreak bring about the equally devastating economic fallout. Unfortunately, the way forward is so far unstable, as a result of epidemiological fluctuation, ever-changing consumption behavior, and the given conditions in the worldwide macroeconomy.

However, the coronavirus crisis and social restrictions have shown that there has never been a more critical time to be truly digital. Thousands of Americans, Europeans, and Asians are tested positive for the virus. Governments are forced to shut down schools and universities, restaurants and beauty salons, airports and railway stations. They have to cancel public events, reschedule the Olympics, and postpone the elections. Some companies have organized remote working, while others had to cease operations.

Social distancing and isolation give a boost to online services, including e-shopping and door-to-door delivery, distance learning, video streaming, communication and management tools, digital banking, and more.

How Banks Respond or Crisis Management During the Coronavirus Outbreak

Unlike many other industries, banks and financial service providers have online solutions and technical capabilities that allow individuals to address nearly all their banking needs without even getting off the couch or bed. Digital payment solutions and mobile banking apps are on the rise now since even the World Health Organization asks people to prefer online payments to cash whenever possible.

However, except for the promotion of digital payment products and branch-specific restrictions, what other steps do banks take to come through dark times and support their customers? — Many banks have approved loan payment deferrals, waived overdraft and late fees, and extended credit lines. Fintechs are extending trial periods, waiving or reducing their campaign/setup/subscription fees, and accelerating deployment or integration of their services for businesses.

Nevertheless, it’s worth noting that in the context of strict quarantine, offering traditional services may not be sufficient. Being able to do business online is critical now, and this tendency is expected to last even after getting back to normal life. We see it as one of the reasons for Monzo to launch its new business line — Monzo bank for business — for immediate bank transfers, automatic money savings, in-app invoicing, and accounting tools. Meanwhile, Revolut bank has officially entered the US market in partnership with the Metropolitan Commercial Bank (MCB) in New York. The Revolut USA eliminates the need to visit brick-and-mortar branches and thus risk your health. The solution comprises numerous features, including the ability to send or request funds from relatives and friends, or exchange currency right in the mobile app with no extra fees.

As we can see, in only a few months (in some cases in several weeks), digital transformation in banking has evolved from a nice-to-have cost optimizer into the only way to run a business.

Coronavirus Economic Impact Consequences and Why ‘Now’ Is the Best Time for a Digital Bank?

These days most changes in the banking industry are driven by the coronavirus effects on customer behavior. The virus has caused a profound shift in reality, and fintechs turned out to be more prepared for this crisis than anyone else. Being a rather young sector, the vast majority of representatives is cloud-native and fully-digital — those criteria that many banks are recklessly missing. Do you wonder why owning a fully digital banking platform is so important? According to the recent survey:

Eighty-two percent of people are concerned about going to the local bank;

of people are concerned about going to the local bank; Now sixty-three percent of individuals are more prone to try out new services offered by mobile banking or website than before the quarantine;

of individuals are more prone to try out new services offered by mobile banking or website than before the quarantine; Forty-nine percent of customers are less likely to apply for a loan if it requires visiting a physical branch.

Considering all these factors, it’s hardly surprising that banks are now dependent on fintech firms more than ever. Of course, these relationships have been pushed forward by a downturn, and they’re gaining traction quickly though they are likely to turn to advantage for both parties and evolve into long-term strategies.

The fintech adoption rate is projected to rise in the coming months since most crisis management plans for banks are centered around a partnership with the fintech sector that, in turn, will have to enhance its offerings and products to support businesses, partners, and customers affected by the crisis.

Additionally, online digital banking products are in a position to gain a strong footing with small businesses, as they are also wrestling against the corona consequences. We see multiple restaurants, cafes, and shops being forced to make a pivot to the digital space, and in this circumstance, paytech, along with payment-as-a-service platforms, is in the midst of the event. In most cases, receiving and sending payments online isn’t native for the hospitality industry, but now this feature is vital; that’s why top digital banks have launched various campaigns to support small businesses and help them live through hard times.

Is There Life After the Corona Outbreak? — Digital Banking Trends and Challenges to Expect

Working with fintechs and reputed banks globally, at Dashdevs, we truly believe that digital financial services are the core of the global economy. Changes in this sector will imply changes in the whole area, but the difference is that in the context of a crisis, all the activities happen at a rapid pace.

In the short run, we expect to see an even higher demand for digital banking services that will push many incumbent institutions to ramp up their innovation efforts. As a result of obsolete systems, processes, and culture, most organizations will be forced to partner with fintech companies to respond to customer needs and launch better digital mobile banking products to the market immediately.

Taking on the new project, we often start with analyzing the market, defining the competitors, and testing digital-only banks. Therefore, we should mention that still for many banks, the key challenge will be to make services fully-digital, but not only ‘digital-like.’ In those cases, when the only way to open an account or pay is online, the entire process should be quick, clear, and user-friendly.

Except for keen demand and the rise of new products, we’re also looking to governments to support digital revolutions in the banking sector. For instance, to alleviate the consequences of the coronavirus impact on the economy, South Korea has softened rigid regulations in fintech, data and artificial intelligence (AI), technology entrepreneurship, and other sectors. Meanwhile, US banks are also asking for temporary regulatory relief due to the crisis. All while the government in Denmark agrees to cover 75 percent of employees’ salaries to support the private sector if the latter promises not to reduce staff.

Broadly speaking, business downturns result from extraordinary circumstances, and during these periods, the ability of companies to survive is mainly defined by their ability to make a stringent and quick transformation addressing the new environment. This is true not only for banking but for other industries as well. How will hospitality react? How will airlines reform? As we can see, having a crisis management plan is critical for every industry and every business regardless of the size.

Final Thoughts

Living through dark times is half the way since it will be up to financial management teams to analyze the situation, draw conclusions, and adjust their business playbook accordingly. Moreover, in the vast majority of cases, plans crafted late last/early this year are no longer relevant.

Just as important to work out communication strategies for all the stakeholders, including clients, employees, partners, investors, and the government, to prevent the information gap. People are looking for leadership, so it’s important to make sure that all your messages are consistent, informative, and confident.

Notwithstanding all the fear and desperation, we can see how things are changing. Whether it’s couture sewing protective gear for healthcare workers, volunteers helping the vulnerable with shopping, use of 3D printers to make up the deficiency in ventilators for hospitals, or numerous donations to support medical centers, COVID-19 research, vaccine development, and more. The world is consolidating.